The UK advertising regulator has issued a reprimand against the Arsenal football club’s advertising of “fan tokens” in the regulator’s latest attempt to restrict the marketing of cryptocurrencies and related products.
The Advertising Standards Authority said Wednesday it had investigated two Arsenal advertisements that went online in August and found them to be “irresponsible” and in violation of UK marketing rules.
The ruling against Arsenal, which follows a series of similar measures last week, comes at a time when an increasing number of crypto service companies and tokens themselves are expanding their advertising to sports fans.
The ASA told the Financial Times last week that expanding its cryptocurrency regulations to include crypto assets in general, like fan tokens, would be high on their agenda for the New Year.
Arsenal ran a promotion on their website and Facebook this summer that, according to ASA, is promoting their fan token under the ticker symbol $ AFC. Fans who want to buy tokens that allow holders to have a say in official club decisions must first buy a digital currency called Chiliz via the Socios crypto platform. The more tokens a fan has, the more weight their votes have.
The ad on Arsenal’s website contained some revelations, including a warning that the price of fan tokens “is dependent on supply and demand and therefore can go up as well as down”. It also indicated that owners “should be aware that they may lose some or all of the money invested”. The later published Facebook advertisement did not contain these warnings.
The ASA found that the ads “trivialized investing in crypto assets” and that they were “misleading” in not highlighting investment risk.
In a response released by the ASA, Arsenal said its campaign aimed to “raise awareness” of the benefits of owning the products the club claimed are “utility brands that are used to promote fan participation and.” therefore differ significantly from cryptocurrencies “.
The London-based club said it believed the tokens themselves and their relationships with cryptocurrencies were “largely understood” by supporters of the club and that the football community was already becoming aware of Socios through the platform’s partnerships with other European clubs may be.
Although the tokens were not advertised as financial products, the watchdog claimed that Arsenal should have pointed out that crypto assets are not regulated in the UK as it means the products do not offer consumer protection associated with many regulated financial instruments.
Socios claims to have created fan tokens for more than 40 soccer clubs, including Paris Saint-Germain and Manchester City. It has more than 1.3 million users from 167 countries.
The platform enables crypto enthusiasts and traders to speculate and trade fan tokens. The cryptocurrency Chiliz is the main exchange unit on their platform, but the digital coin can also be traded on major crypto exchanges such as Coinbase and Binance.
While football clubs’ revenues have plummeted in the pandemic, fan tokens have grown in popularity. According to data aggregator CoinGecko, their total market capitalization is $ 225 million.
Source: Crypto News Austria