A cross-party committee in the United Kingdom is calling upon the government to join forces with non-fungible token (NFT) marketplaces to combat copyright infringement. In a report published on Wednesday, the committee outlined its recommendations, which include the establishment of a code of conduct to protect creators.
NFT copyright infringement arises when an NFT is generated from a creative work without securing permission from the original creators and owners. Such cases have led to legal disputes in both the UK and the US.
Dame Caroline Dinenage MP, who chairs the Culture, Media, and Sport Committee, voiced her concerns about the unauthorized use and promotion of artists’ work, stating, “Artists are at risk of seeing the fruits of their hard work appropriated and promoted without permission, while fraudulent and misleading advertisements add an extra layer of risk for investors involved in what is already an inherently risky business.”
The committee initiated an inquiry into NFTs in November to delve deeper into this rapidly growing phenomenon.
In addition to addressing copyright infringement, the report also raised concerns about tokens released by UK football clubs. These tokens offer members exclusive benefits, such as voting rights on club decisions, access to merchandise, and unique experiences.
The committee emphasized the potential financial risks associated with fans speculating on sports-based crypto assets, which could harm supporters and tarnish the reputation of football clubs. Dame Caroline Dinenage remarked, “In the world of sports, clubs are promoting volatile crypto asset schemes to extract additional funds from loyal supporters, often with promises of privileges and perks that fail to materialize.”
Furthermore, the committee called on those involved in promoting NFTs to take responsibility for consumer protection. This call for accountability underscores the importance of safeguarding individuals who engage with this emerging market.
New UK Regulations Take Effect
The United Kingdom’s Financial Conduct Authority (FCA) has introduced new rules that require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized entity.
These updates include exchanges providing clear warnings to customers about the risks associated with crypto investments. Marketing materials must be fair, transparent, and not misleading, and a 24-hour cooling-off period for new customers is now mandatory.
While the FCA has extended the deadline for implementing technically challenging features, such as the cooling-off period, until January 2024, firms are expected to adhere to the “core rules” starting from October 8.
Leading crypto exchanges like Coinbase, Revolut, and Binance have updated their mobile and web applications to comply with the new regulations. Coinbase and Revolut have informed their customers about the changes via email, which included the addition of “risk disclaimers” for crypto transactions. Users were also asked to update their mobile applications accordingly.
Binance has launched a dedicated webpage specifically for its UK customers. Although the exchange temporarily suspended operations through its mobile app, it later resumed, assuring its British users of compliance with the new regulations.
