UK Committee Urges NFT Consumer Protections, Ban on Sports Fan Tokens

• UK parliamentary committee calls for greater protections around NFTs and bans sports teams from issuing “fan” tokens
• The committee raises copyright concerns due to the speed of NFT minting versus enforcing creator rights
• Government advised to collaborate with marketplaces to establish a code of conduct against infringing and fraudulent NFT sales

A UK parliamentary committee has called for greater protections around NFTs and prohibited sports teams from issuing “fan” tokens.

In a new report, the bipartisan group warned about copyright risks from the speed of NFT minting versus enforcing creator rights. It advised the government to work with marketplaces on a code of conduct against infringing and fraudulent NFT sales.

UK committee suggested banning fan tokens

The committee also suggested banning fan tokens issued by football clubs and other sports organizations. It claimed the volatile assets often fail to deliver promised perks while exposing fans to financial risks.

Quoting the report, club-issued tokens extract extra money from loyal fans “often with promises of privileges and perks that fail to materialize.” As such, the committee argued that fan engagement metrics should exclude token use.

The recommendations aim to address growing concerns around consumer protection in the largely unregulated NFT market. However, enacting a fan token ban could face pushback from sports leagues profiting from the offerings.

As NFTs gain adoption, calls for more oversight of risks to creators and buyers are mounting. The UK committee’s proposals underscore pressures to balance innovation with safety for a nascent technology.

How the government responds will signal its posture toward nascent digital asset markets. But the debates highlight that regulation of crypto’s newest frontiers is rapidly evolving across jurisdictions.