Non-fungible tokens (NFTs) and the blockchain

Intellectual property laws and copyright protection are central to enabling artists to create, innovate and make a living from their work. Emerging technologies that undermine these protections have a profound impact on individual artists and the UK’s world-leading creative industries more generally. We recommend that the Government engages with NFT marketplaces to address the scale of infringement and enable copyright holders to enforce their rights. The Government should also address the impact of safe harbour provisions by introducing a code of conduct for online marketplaces operating in the UK, including NFT marketplaces, that protects creators, consumers and sellers from infringing and fraudulent material sold on these platforms.

We recommend that the Government publishes its analysis of the implementation of Article 17 of the European Union Directive on Copyright in the Digital Single Market, and equivalent approaches undertaken by countries outside the EU, by the end of the year. (Paragraph 19) Professional sport

The recent plateaus in professional sports leagues’ revenues and the zero-risk nature of crypto revenue for clubs has incentivised partnerships between professional sport and crypto companies. However, the unique relationship between clubs and fans means that fan speculation on sport-based cryptoassets carries a real risk of financial harm to fans and reputational harm to clubs. We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups. We recommend that any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens. (Paragraph 29) Advertising

We welcome the Government’s recently articulated intention to introduce statutory regulation for online advertising, in line with our conclusions and recommendations from our “Influencer culture” inquiry last year. We recommend that the Government respond to the evidence we have gathered on misleading and/or fraudulent advertising for NFTs. It should ensure that any regime compels the entirety of the advertising supply chain take steps to mitigate the risks of harm to consumers from the marketing of NFTs. We further recommend that the Ministerial-led taskforce explicitly reviews the marketing of NFTs and other cryptoassets to address the prevalence of misleading and fraudulent ads. (Paragraph 38) 22 NFTs and the Blockchain: the risks to sport and culture