(qlmbusinessnews.com Thurs, 12th Oct, 2023) London, UK —
“Crypto Fan Tokens Face Scrutiny by MPs Over Risks to Supporters”
UK MPs have voiced concerns about sports clubs promoting cryptocurrency fan tokens, highlighting the potential risks to fans and club reputations. The Culture, Media, and Sport committee has called on clubs to be cautious when dealing with non-fungible tokens (NFTs) and similar assets in sports and the arts.
New regulations from the Financial Conduct Authority (FCA) now require firms to display warnings on crypto investments, advising people not to invest unless they are willing to accept the risk of losing their investment. NFTs, unique digital assets that can be bought and sold, have faced fluctuating prices and are often used to issue fan tokens, granting fans access to various privileges such as voting in polls or ticket ballots.
While these tokens can be traded, their values can be highly volatile, posing financial risks to fans. MPs argue that clubs should prioritize meaningful fan engagement over these schemes.
Additionally, concerns have been raised regarding the increasing use of crypto assets in the arts, potentially allowing artists' work to be used without permission. The FCA has included marketing requirements for fan tokens and similar crypto-assets within its broader rules for financial promotions since October 8. This change means that firms promoting these tokens must be transparent about investment risks and must not inappropriately encourage investment.
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