- The Advertising Standards Authority (ASA) has criticized Arsenal for failing to add risk warnings to Socios’ token promotion.
- Arsenal, in its current promotion of the Socios fan token on its official website, has added a risk warning.
Arsenal Football Club has received a second warning from the UK advertising watchdog for promoting a Non-Fungible Token (NFT) to fans.
According to reports, Arsenal sent a promotional email to fans last year, giving them the chance to win a free non-tradable $AFC Fan Token. However, the Advertising Standards Authority (ASA) has criticized the club for failing to provide sufficient clarification that “the value of an investment in paid-for tokens was variable”. Also, the club failed to inform its members that crypto assets were unregulated.
It is important to note that the “$AFC Fan Token” was launched in partnership with Socios to give voting rights on official decisions to fans and also provide them “the opportunity to earn VIP real-life experiences, unrivaled access to digital club-related events”.
According to ASA, the club’s token promotion is misleading as “it trivialized investment in crypto assets by omitting appropriate and prominent risk warnings.”
ASA previously banned a post made by Arsenal on its Facebook page and website promoting the fans’ token. According to reports, the club took advantage of their consumers’ lack of knowledge and inexperience in crypto assets to mislead them by not stating that the NFTs were purchased with another cryptocurrency.
Arsenal adds risk warnings to the current promotional post of Socios fan token
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown in an interview stated that ASA as the Agency mandated to officiate crypto trading flagged down Arsenal football club for promoting tokens without attaching a high-risk warning.
Streeter further stated that football clubs and soccer stars see NFTs as a fresh stream of revenue. With the market crash in the past few months, many investors have been left with hefty losses. For this reason, ASA is tasked to monitor and assess complaints against every company to protect consumers.
Arsenal, in its current promotion of the Socios fan token on its official website, has added a risk warning, informing consumers that the tokens are a form of crypto assets. They also clarified that users must purchase the Chiliz ($CHZ), and exchange it for the fans token after downloading the Socios app.
The club further warns that:
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Although we only promote $AFC Fan Tokens as a tool to engage with the club, we recognize that a secondary market for trading does exist. As such, we remind you that: a) the value of crypto assets is variable and can go down as well as up; (b) crypto assets are unregulated in the UK, and (c) capital gains tax may be payable on any profits made on the sale of crypto assets.
In addition, consumers are asked to only spend an amount they can afford to lose, and should look for individual financial advice if they are in doubt. The club also advises people to not purchase any crypto asset if they have no full understanding of its nature and the risk involved.