UK Committee Warns Against Fan Tokens
The UK House of Commons Culture, Media, and Sport Committee has released a report cautioning soccer clubs about the use of fan tokens. The committee’s 30-page report explored the challenges presented by non-fungible tokens (NFTs) in the arts and sports sectors.
Fan tokens are cryptocurrencies that offer benefits to fans, such as voting on an athlete’s entrance music or selecting a team’s jersey. However, the report highlighted criticisms that fan tokens have not delivered on promises of fan engagement.
The committee expressed concern that clubs may continue to promote fan tokens despite their price volatility and reservations among fan groups. As a result, the committee recommended excluding fan tokens from any measurement of fan engagement in sports.
The report also raised concerns about NFTs linked to sports clubs, likening them to gambling. Previously, the committee suggested that retail trading of unbacked cryptoassets should be treated as gambling.
The UK is currently working on regulations surrounding NFTs. In recent news, a cross-party committee called on the government to collaborate with NFT marketplaces to combat copyright infringement and establish a code of conduct for creators.
Countries Implementing Regulations for Sports Platforms
Many countries globally are implementing regulations for Web3 sports platforms. France, for example, is introducing the SREN bill to enhance digital security and demonstrate its proactive stance on emerging technologies like NFTs and cryptocurrencies.
The bill, also known as the “Sorare law,” is under review by the National Assembly. French company Sorare, famous for its fantasy sports game using free cards or NFTs, reached an agreement with the Autorité nationale des jeux (National Gaming Authority) last year to avoid being classified as gambling.
The bill includes provisions specifically for games based on NFT and cryptocurrency technologies, distinguishing them from traditional gambling based on financial commitment, luck, and potential financial gains.
Hot Take: UK Committee Urges Caution in Fan Token Use
The UK House of Commons Culture, Media, and Sport Committee have issued a warning to soccer clubs regarding the use of fan tokens. The committee’s report raises concerns about the lack of fan engagement delivered by these tokens and the potential for price volatility. It recommends excluding fan tokens from any measurement of fan engagement in sports.
Additionally, the report highlights similarities between NFTs linked to sports clubs and gambling. The committee urges the government to consider retail trading of unbacked cryptoassets as gambling. This development aligns with the UK’s ongoing efforts to regulate NFTs.
As countries worldwide implement regulations for Web3 sports platforms, France is introducing the SREN bill to enhance digital security. The bill includes provisions specifically addressing NFT and cryptocurrency technologies, differentiating them from traditional gambling based on key factors.
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