Arsenal, of English soccer’s top-tier Premier League, have been censured by the UK’s Advertising Standards Authority (ASA) for adverts relating to ‘fan token’ cryptoassets that the club offers.
In a ruling published yesterday, the ASA said that two adverts did not make clear the risk of trading in cryptoassets, that doing so was unregulated in the UK, and that there could be tax implications for doing so.
Both adverts related to Arsenal’s $AFC fan token, which was launched in partnership with blockchain fintech provider Chiliz on its Socios fan engagement platform earlier this year.
The first advert in question was published on Arsenal’s website on August 6, 2021, under the title “$AFC Fan Token: Everything you need to know” and read: “In order to buy $AFC fan tokens you need to purchase the cryptocurrency Chiliz. Please remember that the future value of Fan Tokens is dependent on supply and demand, and can therefore go up as well as down. Fans should be aware that they could lose some or all of their money invested. We advise you to spend only what you can afford and seek independent financial advice if required.”
The second was a post on Arsenal’s Facebook page that stated: “$AFC in now live $CHZ” and “Ben White, Calum Chambers and Kieran Tierney have had their say … But what song do you want to hear when we win? Download the Socios app to get your token and vote.”
The ASA found that the adverts did not make clear that fan tokens were cryptoassets that could rise or fall in price or that purchasing another cryptocurrency, Chiliz, was required to buy them.
As such, it also found that the ads could take advantage of consumers’ lack of experience in dealing with cryptoassets.
The ASA instructed Arsenal that the ads must not appear again in the same form and that future ads must not “trivialize investment in cryptoassets” or “irresponsibly take advantage of consumers’ lack of experience or credulity by not making clear that CGT could be due on cryptoasset profits.”
It must be made clear in future, the body said, that fan tokens are cryptoassets, the value of cryptoassets is variable, and cryptoasset trading is unregulated.
A spokesperson for the ASA has been quoted as saying: “Cryptoassets are a red-alert priority issue for us. We won’t hesitate to take action against ads that break our rules."
Noting that the clubs would “endeavor to comply” with the guidance provided, a spokesperson for Arsenal said: “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.”
The censuring of Arsenal will resonate both in the UK and worldwide as crypto companies make major inroads into the world of sports through sponsorships and other partnerships.
Socios itself says it now has partnerships with over 100 major sporting organizations around the world.
A recent GlobalData report, meanwhile, noted that there was a 285% increase in crypto deals in the Premier League between 2020 and 2021, with the league having opened an investigation into the growing relationship between cryptocurrency firms and its clubs due to concerns of fans about the industry’s lack of regulation.
Elsewhere, the international cryptocurrency platform Crypto.com recently agreed a 20-year naming rights deal for Los Angeles' iconic Staples Center worth a reported $700 million.