The UK's advertising watchdog, the Advertising Standards Authority (ASA), has banned two advertisements by the Premier League football club, Arsenal for its crypto-based fan token scheme.
The adverts for $AFC fan tokens were deemed by the ASA to be misleading fans over the risks of cryptocurrency investing. The first advert published on August 6th, 2021 described the token, and how it could be used within the Socios app.
Six days later, a second advert was uploaded on Facebook featuring Arsenal footballers Ben White, Calum Chambers and Kieran Tierney promoting the token, along with text that briefly detailed $AFC, the Chilliz ($CHZ) cryptocurrency and the Socios app.
"Took Advantage of Consumers’ Inexperience"
Despite an appeal lodged after the complaint last year, the ASA upheld its decision that the two adverts were “misleading because they failed to illustrate the risk of the investment,” and “irresponsible because they took advantage of consumers’ inexperience or credulity and trivialized engaging with and investing in crypto assets.”
Arsenal, who have finished behind their North London rivals Tottenham Hotspur for the last six seasons, initially appealed the decision, saying the warnings were enough and their audience was knowledgeable on crypto. The club also tried to argue the point that there was no regulatory basis to include information regarding capital gains taxes incurred from trading the tokens, despite them being crypto assets and, as such, subject to such rules.
However, the complaint was upheld and Arsenal's appeal was rejected. The ASA stated the Arsenal ad was misleading “because it did not make clear that the tokens were crypto assets, which could only be obtained by opening a crypto assets exchange account, and in the case of paid-for fan tokens, required the purchase of another cryptocurrency.”
The UK advertising watchdog ruled that the adverts “must not appear again in the form complained about.”
The ASA also warned Arsenal:
- to make it clear that investments with paid-for fan tokens are subject to volatile markets and are unregulated crypto assets.
- not to mislead consumers by omitting material like the need to open a crypto assets exchange account and purchase various cryptocurrencies in order to buy the tokens.
- to make sure future ads are not trivialized by omitting risk warnings and taking advantage of consumers’ lack of experience with crypto.
