A UK watchdog has ruled that two ads by English football club Arsenal promoting the sale of crypto-based fan tokens were against advertising rules in the country.
The Advertising Standards Authority (ASA) ruled yesterday (22 December) that the ads, one on the club’s website and one in a Facebook post, did not warn enough about the financial risk associated with buying fan tokens.
By owning fan tokens, available on the popular virtual assets app Socios for £2 each, fans of football clubs can support them and vote on relatively low-stake decisions such as what to name a training ground or what songs to play at the stadium.
The advertisements posted by Arsenal in August asked fans to purchase the club’s own fan token called $AFC through the Socios app. But the ASA found these to be “irresponsible because they took advantage of consumers’ inexperience or credulity and trivialised investment in crypto assets”.
The ASA also said that the first advertisement, posted on the club’s website, was “misleading” because it did not make it clear that the tokens were crypto assets. It ruled that the ads “must not appear again in the form complained about”.
Arsenal fan tokens can only be purchased on the Socios app in exchange for the cryptocurrency Chiliz, which is also bought through the app.
Arsenal challenged the ruling saying it had warned fans of the risk associated with crypto-based fan tokens and said it wanted an independent review of the ASA’s findings.
“We take our responsibilities with regard to marketing to our fans very seriously. We carefully considered the communications to fans regarding our promotions and provided information regarding financial risks,” Arsenal told BBC News.
Crypto and fans
Football fans have been spending millions on fan tokens, but Arsenal is the first major club to be called out by a national watchdog for its advertisements. According to a BBC News estimate, more than £262m has been spent on fan tokens to date.
So far, 24 European football clubs, including eight in the English Premier League, have either launched or are considering launching their own fan tokens – mostly through Socios, which told BBC News earlier this month that it had sold between $270m and $300m worth of coins through its app.
However, the value of many fan tokens has dropped since they were first launched, with Manchester City and Lazio tokens dropping by up to 70pc, according to crypto analysts Protos.
In September, Spain’s La Liga partnered with fantasy football platform Sorare to launch NFTs for all its players, allowing fans to trade and play with digital cards of the players.
“NFTs are the future of global sports fandom because they allow fans to come together and to feel ownership of the sports they love,” Nicolas Julia, CEO and co-founder of Sorare, said at the time.
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