Arsenal FC: “Irresponsible” crypto fan token ads have violated advertising standards and regulatory requirements
The British Advertising Standards Agency (ASA) ruled the ads – a Facebook post and a page on the club’s official website – exploited the inexperience of the supporters and the “trivialized” investments in crypto assets.
Arsenal is one of several leading football clubs selling fan tokens through the Socios app, which gives fans the opportunity to influence decisions in their team and get access to “exclusive promotions,” according to the Socios website. Arsenal partnered with Socios, owned by blockchain sports company Chiliz, in July.
A Facebook post promoting the club’s $ AFC fan tokens on Aug. 12 read: “Ben White, Calum Chambers and Kieran Tierney have spoken out … but which song would you like to hear when we do win? Download the Socios app to receive your token and vote. “
And a webpage posted on Aug. 6 was titled “$ AFC Fan Token: Everything You Need to Know,” and it had information explaining what the Arsenal Fan Token was and the benefits it offered.
There are thousands of different types of crypto assets, or cryptocurrencies, an entirely digital monetary system made up of “coins” or “tokens” controlled by a decentralized ledger. In general, most cryptocurrencies have no intrinsic value.
Direct ownership and transactions in crypto assets are mostly unregulated and offer very little consumer protection.
The ASA said Arsenal had not made it clear that their “token” was a crypto asset that could only be obtained by opening an account and exchanging it for another cryptocurrency that needed to be purchased.
“The ads must not reappear in the offending form,” said the ASA, adding that future ads must not trivialize investments in crypto assets and must make it clear to customers that crypto assets are unregulated and the value of investments in the products is variable.
“We also told them to make sure they didn’t mislead consumers by leaving out essential information in their ads, including the fact that fan tokens are a crypto-asset that must be bought with another cryptocurrency” said the ASA.
Arsenal had argued that fan tokens, which are used to encourage fan participation, were “substantially” different from cryptocurrencies, which were virtual currencies used as a means of payment.
It told the ASA it was reminding customers, “We encourage you to only spend what you can afford and get independent financial advice if necessary,” the ruling read.
The club said the tokens were advertised responsibly and that Socios was known in the football community as a cryptocurrency platform because they sponsored and worked with a number of European football clubs.
The football club intends to seek an independent review of the ASA ruling, Arsenal said in a statement to CNN.
“We take our marketing responsibility to our fans very seriously,” said an Arsenal spokesman.
“We have carefully examined the communications to fans regarding our promotions and provided information on financial risks.
“We will endeavor to adhere to the ASA’s guidance on future communications in this fast-paced area, but will seek an independent review of the ASA’s decision to gain more clarity on the ASA’s current position.”
Socios told CNN that the company welcomed Arsenal’s request for an independent review.
“We welcome Arsenal’s request for an independent review,” a Socios spokesman told CNN. “Clarity is needed to ensure that all companies are complying with the latest guidelines,” a Socios spokesman told CNN.
In August, the Arsenal Supporters Trust (AST) warned, “Socios.com is a cryptocurrency product, but none of the marketing offerings we’ve seen deal with it. We asked Arsenal to say so in advance.
“They should also make it clear in their communications that cryptocurrency is an unregulated activity and that anyone thinking of depositing should seek financial advice first and be aware that they may lose some or all of their money.”
Following the ASA ruling, AST tweeted: “If you are an Arsenal fan, be extremely careful with Socios. You don’t need to be in touch with Arsenal and there is a high chance you will lose your money. ”