Anime conventions always walk a fine line when holding Artist Alleys. Due to strict copyright laws, there are legal and illegal ways of doing things and since the Artist Alley is mainly a fan oriented space, it gets pretty dicey for convention holders.
Just recently, Maryland’s Katsucon had to take a step back after making a zero-tolerance stance in their policy that “demanded that fans provide proof that they have copyright owners’ permission to make and sell fan art”. With much outcry from attendants, Katsucon revised their policy to reflect that fans may sell their work unless the copyright holder lodges a complaint about their products.
I’ve actually held a table at an Artist Alley and from my experience most attendants offer their own original creations. There may have been fan art but it wasn’t a direct copy of a drawing the original creator made. These were drawings that had characters in different positions, colorings, styles, and so on. With that said, there were some Artist Alley sellers though who sold buttons, bookmarks and other little items that held copyrighted work. That, in my opinion, is illegal.
As with all conventions, they all have their own rules and policies but from my perspective, you will never go wrong with creating your own original work. Leave the fan art at home.