(Bloomberg) -- The UK parliament started an inquiry into nonfungible tokens, the digital collectibles for which Prime Minister Rishi Sunak has been a champion.
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The Digital, Culture, Media & Sport committee in the House of Commons announced the initiative in a statement on Friday, adding that it will also study the wider blockchain technology that underpins NFTs.
“MPs are expected to consider whether NFT investors, especially vulnerable speculators, are put at risk by the market,” the DCMS committee said in the statement. “The inquiry may also look into the wider benefits that NFTs and the blockchain could provide the UK economy.”
NFTs rose into public consciousness in 2021, driven by the success of the Bored Ape Yacht Club collection that became a hit with celebrities. But interest in NFTs has dried up this year as crypto assets crashed, with trading tumbling more than 95% between January and September by one estimate.
Read more: Europe’s ‘First’ NFT Vending Machine Gets Cold London Reception
The DCMS committee’s statement cited fears that “overvalued assets may be dumped on ‘greater fool’ investors,” adding that “NFT regulation in the UK is largely non-existent.” It also made a reference to this year’s drop in NFT sales.
Sunak, who took over as prime minister last month after Liz Truss’s brief and tumultuous reign, emerged as a key crypto champion while he was Chancellor of the Exchequer. In April, he announced that he’d instructed the Royal Mint to create an NFT.
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