Britain’s advertising watchdog warned Arsenal on Wednesday over ads for its “fan tokens,” a type of cryptocurrency embraced by soccer clubs this year as coronavirus pummelled their revenues.
The Advertising Standards Agency (ASA) said two ads posted in August on Arsenal’s website and on Facebook were “misleading” as they did not make clear the risk of trading crypto, potential tax implications or that the tokens are not regulated in Britain. It said the ads must not appear again in the same form.
Fan tokens allow supporters of soccer and other sports clubs to vote on minor decisions such as songs played at matches after a goal is scored, or images used on social media.
The tokens, which can be traded on exchanges like other cryptocurrencies, are prone to wild swings in price and often have little connection to on-field performance.
The ASA’s move is part of a wider focus by the watchdog on cryptocurrency ads in Britain.”Cryptoassets are a red-alert priority issue for us,” a spokesperson said. “We won’t hesitate to take action against ads that break our rules.”
It said London-based Arsenal’s ads were “irresponsible because they took advantage of consumers’ inexperience or credulity and trivialised investment in cryptoassets”.
An Arsenal spokesperson said it was seeking an independent review of the ruling, and that it would “endeavour to comply” with the watchdog’s guidance.
“We take our responsibilities with regard to marketing to our fans very seriously,” the spokesperson said. “We carefully considered the communications to fans regarding our promotions and provided information regarding financial risks.”
Arsenal had told the ASA that fan tokens were designed to boost participation by supporters, and were “materially different” to other cryptocurrencies used as a means of payment.
Many fans have dismissed the tokens as offering only superficial participation that adds to the costs of following their teams. Others say they appreciate a novel way to engage with their teams.
Arsenal is one of several sports club turning to alternative revenue sources of revenue after coronavirus lockdowns, which consultancy Deloitte said fuelled a 12% drop in earnings at Europe’s top 20 clubs during the last season.
More than 40 clubs from Europe to South America have launched fan tokens. Other English Premier League clubs that have launched, or plan to launch, fan tokens include reigning champions Manchester City, Crystal Palace, Leeds, Everton and Aston Villa.
The largest fan token, launched by Paris Saint-Germain, has a total value of $49 million, according to CoinMarketCap, versus bitcoin’s $929 billion. Arsenal’s totals about $7 million.