London-based football club Arsenal FC has drawn the ire of the UK advertising watchdog Advertising Standards Authority (ASA) for what the regulator calls “Taking advantage of consumers’ inexperience in cryptoassets.”
The regulator banned Facebook and website posts in which the football side promoted fan tokens.
Last July, Arsenal FC unveiled its partnership with blockchain provider Chiliz to launch the fan token, AFC, on the Socios.com app, and published the posts the following month.
Per the ASA, Arsenal said that Fan Tokens were utility tokens used to “encourage fan participation” and were therefore “materially different to cryptocurrencies which were virtual currencies used as a means of payment.” Furthermore, they claimed that the Fan Tokens are not specified investments under the Financial Services and Markets Act 2000, the ASA said.
“In addition, Arsenal said that when the ads were made available to the Club’s followers, Fan Tokens could not be traded on the Socios app,” according to the statement.
The explanations did not convince the watchdog which decided to uphold its decision and ban the team’s ads and promotional activities related to the fan tokens.
“We acknowledged that the ads did not promote the Fan Tokens as an investment or financial product. However, the product was a cryptoasset regardless of how it was promoted and the ads did not contain any information that [the capital gains tax] could be payable on profits from investing in cryptoassets, ”the ASA said. “We therefore considered the potential tax implications were not made sufficiently clear to consumers considering investing in it.”
The regulator told Arsenal FC that the ads must not appear again in the form that was complained about, and required the side “to ensure that their future ads did not trivialize investment in cryptoassets and did not irresponsibly take advantage of consumers’ lack of experience or credulity by not making clear that CGT could be due on cryptoasset profits. ”
A spokesperson for Arsenal told BBC that the side takes its responsibilities with regard to marketing very seriously and it would seek an independent review of the ASA’s ruling “to seek greater clarity on the ASA’s current position.”
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