A UK multi-party committee has urged the government to partner with non-fungible token (NFT) platforms to tackle copyright violations.
The committee, in its Wednesday report, highlighted a series of recommendations, one of which proposes the formulation of a code of conduct to protect artists and creators.
Issues arise when an NFT is created using a piece of art or creative content without securing the necessary permissions from the original artist or copyright holder. Such instances have sparked legal challenges in both the UK and the US.
Dame Caroline Dinenage MP, who chairs the Culture, Media and Sport Committee, voiced her apprehensions regarding the unauthorized distribution and advertisement of artists’ creations.
“Artists face the threat of having their creations exploited and showcased without consent, and the addition of deceptive and misleading advertisements further endangers investors in an already volatile domain.”
In November, the committee embarked on an in-depth investigation into the burgeoning world of NFTs.
Beyond the matter of copyright violations, the report also brought to light concerns regarding tokens issued by UK football clubs. These tokens grant holders exclusive perks, from decision-making power in club matters to special merchandise access and unique experiences.
The committee underscored the financial perils that fans might face when venturing into sports-related crypto assets. Such speculative activities could not only jeopardize supporters but also mar the standing of the football clubs.
“In the sports arena, clubs are pitching unstable crypto projects to garner extra revenue from their devoted fans, frequently with alluring promises of benefits and exclusives that often go unfulfilled,” stated Dinenage.
Moreover, the committee strongly advocated for those championing NFTs to shoulder the duty of safeguarding consumers.
Their push for such responsibility underscores the crucial need to protect participants venturing into this nascent market.
New U.K. Regulations Come into Effect
The Financial Conduct Authority (FCA) of the United Kingdom has introduced new regulations mandating crypto companies to register with the financial oversight body. Moreover, their promotional content needs the green light from a firm authorized by the FCA.
Central to these changes, exchanges are now obliged to furnish explicit alerts to users concerning the potential hazards of crypto investments.
All promotional content should uphold standards of fairness and transparency, ensuring no misinformation is presented. Furthermore, a mandatory 24-hour reflection period has been set for newcomers.
While the FCA has granted an extension until January 2024 for the enactment of intricate components like the reflection period, entities are anticipated to be compliant with the fundamental regulations starting October 8.
Leading crypto platforms like Coinbase, Revolut, and Binance have made necessary modifications to their web and mobile applications to fall in line with the new directives.
Both Coinbase and Revolut reached out to their clientele via email, informing them about the alterations. These changes encompass the incorporation of “risk disclaimers” tied to crypto dealings. Additionally, users were prompted to update their mobile applications to reflect these amendments.
Conversely, Binance crafted a separate webpage tailored exclusively for its UK-based customers.
The platform briefly suspended its mobile app services but subsequently reinstated them, offering reassurances to its UK audience about adhering to the recently established regulations.