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Some members of the U.K. Parliament are advocating for the implementation of crypto regulations to curb the rising criminal activities and protect its citizens. These MPs are of the opinion that the craze to own and trade in cryptos have driven some inexperienced U.K. citizens to make some terrible crypto investment decisions.
An article on inews explained the danger of crypto investments for young people and pointed out some areas where vulnerable people lose their funds. Two particular areas of concern were NFTs and fan tokens popularized by some soccer clubs and even celebrities.
Conservative MP Links Fan Tokens and Cryptocurrency To Gambling
One of the outspoken members of Parliament advocating for the regulation of the industry is Richard Holden. In Holden’s opinion, cryptocurrency could be considered gambling as much as it is considered to be a highly profitable financial investment. He suggests that a clear differentiation should be set to enlighten the vulnerable people for their safety.
The volatility of cryptocurrencies made some traders richer than they were, while making many poorer. Several regulators have raised concerns about this trend and have warned its citizens against trading digital assets for their good.
Several entities, including soccer clubs have leveraged the craze for cryptos to deceive young and inexperienced people into investing in their offerings. The fan token is one of such speculative investments. As the name suggests, Fan tokens are created to maximize fan experience and help them engage with their clubs and earn rewards.
Clubs like Arsenal, Barcelona, and PSG have created fan tokens, but not without coming under fire. Arsenal, for example, was heavily scrutinized and last December, the Advertising Standards Authority banned the club from advertising misleading token ads. The two other clubs are yet to face the consequences of their actions in their respective jurisdictions.
Although the clubs argued that the tokens were created for the fans, the counter-argument is that these tokens may lose value as time progresses because they are neither backed nor based on some aggregators. They are purely based on speculations.
The same can be said of Non-fungible tokens. NFTs are unlike fan tokens because they are entirely subjective. The value of the NFT is determined by the owner most times, and not necessarily the rarity of the item. In the end, the chances of it ending up worthless are high. Also, if the craze for NFTs dwindles, the owner is stuck with an unsellable item.
Regulating The Industry Unnegotiable
MPs are urging the U.K. government to not relent in bringing the much-needed regulations for the industry. While the goal is to protect investors, the rules shouldn’t squash the development of blockchain and what it brings.
MPs are also advocating for clarity in the crypto regulations to be implemented. “Protection” should be “Protection” and “Prohibition” should be “Prohibition.”
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