UK Parliament has asked the public if minimal NFT regulation will be enough amid tanking sales and depreciating value.
The Digital, Culture, Media, and Sport Committee (DCMS) launched an inquiry on Thursday into NFTs and the wider blockchain. Parliament members from several parties have been asked to consider the risks to NFT investors, along with the benefits that NFTs could offer the UK economy.
According to the inquiry, UK’s NFT regulation is largely non-existent, and growth has sparked fears the NFT speculation may be a bubble. It has also led to the fear that the overvalued assets may be dumped on ‘greater fool’ investors.
The inquiry cites how Jack Dorsey’s NFT of his first-ever tweet was sold at auction for $2.9 million — but only attracted the highest bid of $280 when a crypto entrepreneur relisted it in April. The entrepreneur tweeted to show a new offer of 65 ETH last month worth about $103,000 at the time.
DCMS Committee chair, Julian Knight MP, said that NFTs swept through the digital world so fast that there was no time to stop and consider. He went on to explain how the inquiry will decide if greater regulation is needed to protect consumers and wider markets from volatile investments.
Public members may send in comments online until January 6, 2023. The call for evidence poses the following questions:
- Is the UK’s light-touch NFT regulation sufficient?
- What are the potential harms to vulnerable people of NFT speculation?
- Do blockchains offer security to British investors?
- What are the potential benefits to individuals and society of NFT speculation?
The DCMS inquiry came in amid a nationwide scramble to get up to speed with cryptocurrency. The UK police invested 100 million into a crypto task force last month. However, they say it is not enough to crack down on the rapidly growing crypto crime.