UK advertising watchdog slams Arsenal over misleading crypto ads
The UK advertising watchdog has reprimanded Arsenal Football Club for promoting crypto assets without warning fans of the potential associated risks.
The Advertising Standards Agency (ASA) banned cryptocurrency ads promoting Arsenal’s fan token and said they must not appear again. The agency labeled two promotions of Arsenal’s $AFC for irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of crypto investments.
Specifically, the ASA ruled that a content on Arsenal’s official website posted with the title ‘$AFC Fan Token: Everything you need to know’ misled customers over the risks of investing in cryptocurrencies.
“We told Arsenal Football Club to ensure that they made sufficiently clear that the value of investments in paid-for fan tokens was variable and as crypto assets they were unregulated,” the ASA said in the ruling.
The second breach, according to the watchdog, focused on a Facebook post on the club’s official page. It reads: ‘$AFC is now live’ and asked fans: “What song do you want to hear when we win? Download the Socios app to get your token and vote”.
The Advertising Standards Authority (ASA) argued that these contents “trivialized” a “serious and potentially costly financial decision.”
The ASA acknowledged that the ads did not promote the fan tokens as an investment or financial product. However, it said the product was a cryptoasset regardless of how it was promoted, and the ads did not contain any information that capital gains tax could be payable on profits from investing in cryptoassets.
Manchester City was the first to launch a Fan Token
“Therefore, because the ads trivialised investment in cryptoassets and took advantage of consumers’ inexperience or credulity by not making clear that CGT could be payable on profits from investing, we concluded the ads were irresponsible and breached the Code,” it concluded.
An Arsenal spokesman said they would seek an independent review of the ruling, adding that the club had provided information on the financial risks.
The North London club was the second Premier League club to sign up with blockchain provider Chiliz to offer crypto fan tokens on the Socios.com app. Manchester City was the first Premier League club to announce they would launch a Fan Token on the Chiliz platform in March.
Sports fan tokens are utility tokens that provide users of a blockchain platform with exclusive access to voting rights, VIP rewards, AR features, superfan recognition, and promotions.
The price of sports fan tokens is not necessarily tied to the team’s match results or performance. Rather, the digital assets are often dependent on the overall utility of the tokens and the demand for them from crypto investors or fans.