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- 1 The UK’s Culture, Media, and Sports Committee has expressed concerns over the docile norms of NFT marketplaces.
- 2 The report points out that there’s a huge scope of copyright violations in the industry currently.
- 3 They urged the government to work closely with platforms and bring stricter norms.
Non-fungible tokens (NFTs) gave a major boost to artists, creators, and collectors across the globe. They have been touted as the most empowering thing that ever happened to creative professionals. However, it seems that everything is not as rosy as it seems. Recently, a UK parliamentary group highlighted concerns over NFT’s copyright infringement and consumer protection.
What’s the UK Committee Saying About NFTs?
On October 11, the UK’s Culture, Media, and Sport Committee issued a statement regarding NFTs. They remarked that the ease of creating these tokens is leading to potential copyright violation possibilities. The group consists of politicians from both the major parties of the country. They recently published a report on non-fungible tokens in arts, sports, and individual buyers.
According to it, the industry has recently seen quite a few misleading and fraudulent NFT campaigns. Due to these occurrences, it is urging the government to work with NFT marketplaces. It wants the concerned authorities to protect the artists’ work from plagiarism and other surreptitious activities.
The group highlighted that the sports sector has also been affected by these potential risks. Fan tokens have become the recent victims of such instances. For the uninitiated, these tokens function as an engagement tool and are very lucrative for clubs. Despite that, they often fail to deliver their promises and cause potential harm. Once copied, they cause losses to holders and blemish the club’s reputation.
Besides pointing out the specific niches, the report moots the concerns over NFT advertising. It even says that deceptive advertisements pave the way for consumer mistrust. The committee has urged the government to bring transparent advertising practices. It is seeking regulatory intervention for the mitigation of risks. On the other hand, some experts think that this could bottleneck innovation.
What Does Regulatory Surveillance Mean For NFTs?
While the talks of bringing regulations sound logical, they have their own downsides. On the upside, it will stifle the illegitimate copying of tokens making the environment safe for digital creators. It would also weed out unnecessary participants and bring genuine buyers. As a result, consumer confidence will be boosted and it would give rise to some healthy competition.
There are also some notable demerits related to it. First, the stringency of regulation often deprives a sector of innovation. Artists will fear doing something experimental as they will contemplate violating the laws.
Apart from that, the ease of creating coins actually attracts plenty of small-time artists and creators. But when there are legal complexities, they’ll probably stay away from it.
What Does This Mean For NFT Domain?
As discussed above, there are two sides to regulations in the NFT sector. No one really wants to lose their assets to violators but they also want to harbor creativity. Thus, it would take much more than regulations to make the industry fruitful for everyone.
Hopefully, the authorities will conduct discussions with artists and marketplace owners before inducting any rule. After all, it’s all about using technology in the best possible way.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
