Fan tokens have surged in popularity, with clubs across Europe’s top five leagues embracing them
English Premier League club Arsenal has been found in breach of UK advertising rules for running promotions for fan tokens that failed to meet regulatory standards. On Wednesday the Advertising Standards Authority (ASA) ordered the club to stop showing the “irresponsible” adverts after concluding they did not properly highlight the risks involved with cryptocurrencies.
“The ads must not appear again in the form complained about,” the ASA ruled.
The regulator identified two specific adverts — one published on the club’s website on 6 August and another on the club’s official Facebook account on 12 August — which promoted the $AFC fan token.
ASA: Arsenal failed to include necessary financial information
Although the ASA accepted that the adverts did not explicitly market the fan tokens as an investment or promise financial gain, it found Arsenal failed to make clear that capital gains tax (CGT) could be payable on profits arising from investments in crypto tokens.
“Because the ads trivialised investing in crypto-assets and took advantage of consumers’ lack of experience or trust by not making clear that CGT could be payable on gains from investments, we concluded the ads were irresponsible and in breach of the code,” the ASA said.
The regulator also criticised the club for not clearly setting out the risks of trading these assets and for failing to state that the tokens are not regulated in the UK. While the first advert did include wording that the fan tokens could fall in value, potentially resulting in the loss of some or all of an investor’s money, that warning appeared at the bottom of the advert and therefore risked being overlooked by people engaging with the promotion.
Arsenal’s response
In response, a club spokesperson said Arsenal took its marketing to fans extremely seriously. The club stated that it had warned about the financial risks and was keen to ensure the information it provided to supporters was clear. Arsenal also said it would seek an independent review of the ruling to better understand the regulator’s position.
Fan tokens have become mainstream, particularly across European football. Major clubs including Italy’s Inter Milan, France’s Paris Saint-Germain and Spain’s FC Barcelona have adopted these tokens, saying they offer new ways to engage supporters. Through fan tokens, fans can take part in decisions such as which songs are played in stadiums or what items appear in dressing-room decorations.
One company that has been prominent in promoting fan tokens is Socios. Arsenal partnered with Socios to launch the $AFC token, which fans could purchase via the Socios.com app. Transactions for the token were carried out using the cryptocurrency Chiliz.