On Wednesday, Arsenal’s ads for its ‘fan tokens’ drew the ire of Britain’s advertising watchdog. Soccer clubs have embraced this type of cryptocurrency this year, as their revenues took a hit because of the coronavirus pandemic. According to the Advertising Standards Agency (ASA), the two ads that had been posted on Arsenal’s website, as well as their Facebook page back in August, was ‘misleading’ because they did not clarify the risk associated with trading cryptocurrencies. They further did not disclose that the tokens were not regulated in Britain, nor warned of their potential tax implications. The ASA stated that the ads shouldn’t appear again in the same form.
Supports of soccer as well as other sports clubs can use these fan tokens for voting on minor decisions, like the images that are used on social media, or the songs that are played during matches after a goal is scored. It is possible to trade these tokens on exchanges, similar to other cryptocurrencies and they are also susceptible to wild price swings and don’t really have a big connection to on-field performance. The move by the ASA is part of increased focus by the watchdog on all crypto ads in the country.
A spokesperson for the ASA said that crypto has become a red-alert priority and they would not hesitate in taking action against any crypto ad that goes against their rules. It referred to the ads of London-based Arsenal as ‘irresponsible’ because they were exploiting the inexperience of consumers, or their credulity by trivializing the investment in crypto-assets. A spokesperson for Arsenal said that they were going to get an independent review of the ruling. They also added that they would comply with the guidance of the watchdog. The spokesperson stated that they were serious about their responsibilities where marketing is concerned.
The spokesperson added that they had considered the communications with fans carefully when they were coming up with their promotions and had given information regarding financial risks. Arsenal had also informed the ASA that fan tokens are ‘materially different’ from other cryptocurrencies that are used as a method of payment because they are designed for boosting participation from supporters. The tokens have been dismissed by many fans are providing only superficial participation, which only increases their cost of following the teams they support. Others have said that they enjoy using a novel way of supporting their favorite teams.
A number of sports clubs have opted for alternative sources of revenue after the COVID-19 resulted in lockdowns. This had resulted in an almost 12% drop in the earnings of the top 20 clubs in Europe in the last season. Fan tokens have been introduced more than 40 clubs and this includes English Premier League clubs as well. Along with Arsenal, other clubs that have launched fan tokens, or are planning to launch them include Everton, Aston Villa, Crystal Palace, Leeds and Manchester City. Paris-Saint-Germain launched the largest fan token, which is valued at $49 million, whereas Arsenal’s token is valued at $7 million.