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LONDON – Premier League club Arsenal’s promotion of fan tokens broke advertising rules and was banned in Britain for taking advantage of consumers’ inexperience with cryptocurrencies.
The London team said fan tokens are used to encourage participation and are different from cryptocurrencies, which are virtual currencies used as a form of payment.
The Facebook and website posts included a video featuring players Ben White, Calum Chambers and Kieran Tierney.
The Advertising Standards Authority said in an announcement Wednesday that the ads took advantage of the inexperience or gullibility of consumers and trivialized investing in crypto assets, did not illustrate the risk of investing and did not specify that the “token” via the Socios company was an active crypto, which could only be obtained by opening an account and trading with another cryptocurrency.
Token buyers can also make money by trading digital assets at a price determined by market supply and demand, and ultimately by team performance and actions, and therefore can fluctuate significantly. .
Owners can sell and trade their tokens using Chiliz, one of the many cryptocurrencies based on blockchain technology.
Socios lists nearly 50 partnerships with clubs, including Premier League champions Manchester City, Barcelona, ​​Juventus and Paris Saint-Germain. Clubs and socios tout chips as a way to give fans a say in decision-making, but this often comes down to votes on which songs to play before games rather than anything substantive.
The UK Financial Conduct Authority classifies tokens as crypto assets, a complex and sophisticated investment subject to frequent changes in value and which could potentially result in significant losses.
“We recognized that the ads did not promote fan tokens as an investment or financial product,” said ad watchdog, ASA. “However, the product was a crypto asset regardless of how it was promoted and the advertisements did not contain any information indicating that capital gains tax (CGT) could be payable on profits from a investing in crypto assets, so we considered that the potential tax implications were not sufficiently clear to consumers considering investing in them.
The club said they responsibly promote tokens by reminding fans that they only need one token to vote in decisions and should only buy what they can afford. to allow. He also urged buyers to seek independent financial advice if necessary.
“The advertisements trivialized crypto-asset investments and took advantage of the inexperience or gullibility of consumers by failing to make it clear that CGT could be payable out of the profits of the investments,” the ASA said. “We concluded that the ads were irresponsible and violated the code.”
The Arsenal Supporters’ Trust has already raised concerns about the partnership with Socios.
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