UK’s advertising watchdog recently noted that two promotions of Arsenal’s fan tokens ($AFC) broke its code, as per a report by BBC.
The development comes after seven crypto ads were banned by UK’s Advertising Standards Authority (ASA) recently. ASA had said that the ads were “banned for irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.”
This time around as well, the watchdog argued that the club “failed to illustrate the risk of the investment,” noting,
“The ads must not appear again in the form complained about.”
Meanwhile, the report added that the club might seek an independent review of the ruling. This is based on Arsenal’s argument that it provided information around financial risks while offering its fan tokens.
As per the watchdog, Arsenal’s post on its official website on 6 August 2021 was the first breach by the club. Following this, a Facebook post on 12 August 2021 was another strike when it stated,
“$AFC is now live…What song do you want to hear when we win? Download the Socios app to get your token and vote.”
ASA’s investigation revealed reasons for the strike which include irresponsible ads that take “advantage of consumers’ inexperience” and “misleading” promotions that do not illustrate the risk of the investment.
Here, it is worth noting that fan tokens are not limited to a single club. Top soccer clubs that include FC Barcelona, Paris Saint-Germain, AC Milan, Juventus, and Man City have also dived into crypto tokens and NFTs, as per reports.
Socios told BBC News that it sold fan tokens worth $270 million to $300 million through its app.
Protos director of news David Canellis explained,
“Fan tokens are being traded more actively than you’d expect for this type of fan-engagement product.”
He also added that such fan tokens can be volatile due to the small investor base when compared to the large base of traders available for cryptos like BTC. He further commented,
“Speculators know this, so I would consider much of the trade-in fan-token markets to be powered purely by speculators seeking short-term profits.”
In July 2021, the Advertising Standards Authority in the UK had taken note of deceptive crypto ads, warning investors of risks associated with the asset class. Calling these ads “misleading,” ASA had also reportedly started an investigation when FLOKI ads ran on Transport for London (TfL) in October.
However, next year, under ASA “red alert” list, the regulator is expected to bring more comprehensive guidance on crypto ads, which can reportedly include rules on NFTs and fan tokens. Miles Lockwood, the watchdog’s director of complaints and investigations, had told BBC,
“Cryptoassets are a red-alert priority issue for us. Consumers need to know about the risks of investing in crypto assets and companies should make sure that their ads aren’t misleading or socially irresponsible…”