The Advertising Standards Authority (ASA) has ruled that two fan non-fungible token (NFT) adverts by Arsenal Football Club were “irresponsible” as they “trivialised” investment in cryptoassets.
The watchdog questioned two ads made by the English football club that promoted Arsenal fan tokens ($AFC) via the Socios platform.
The first breach (a) was content on Arsenal’s official website – in particular a page posted on 6 August 2021 with the title ‘$AFC Fan Token: Everything you need to know’.
The second breach (b) was a Facebook post on the club’s official page, posted on 12 August 2021, which read: ‘$AFC is now live’ and asked fans: “What song do you want to hear when we win? Download the Socios app to get your token and vote”.
The ASA made three challenges against the ads and they were upheld:
- Ads (a) and (b) were “irresponsible because they took advantage of consumers’ inexperience or credulity and trivialised investment in cryptoassets”;
- Ads (a) and (b) were “misleading because they failed to illustrate the risk of the investment”;
- Ad (a) was “misleading because it did not make clear the token was a cryptoasset, which could only be obtained by opening an account and exchanging with another cryptocurrency which had to be purchased”.
Make it clear
The ASA said in a statement: “The ads must not appear again in the form complained about. We told Arsenal Football Club to ensure that their future ads did not trivialise investment in cryptoassets and did not irresponsibly take advantage of consumers’ lack of experience or credulity by not making clear that capital gains tax could be due on cryptoasset profits.
“We told them to ensure that they made sufficiently clear that the value of investments in cryptoassets was variable and cryptoassets were unregulated.
“We also told them to ensure that they did not mislead consumers by omitting material information in their ads, including that fan tokens were a cryptoasset that had to be bought using another cryptocurrency.”
An Arsenal spokesperson said: “We take our responsibilities with regard to marketing to our fans very seriously. We carefully considered the communications to fans regarding our promotions and provided information regarding financial risks.
“We will endeavour to comply with the ASA’s guidance regarding future communications in this fast moving area, however we will be seeking an independent review of the ASA’s ruling to seek greater clarity on the ASA’s current position.”
Modern day trading cards
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘’The Advertising Standards Authority has taken on the role of referee in the high stakes game of crypto trading, with the whistle blown on Arsenal football club, the latest in a string of rulings against companies which are flogging coins or tokens without high risk warnings.
“ASA officials are running the line, assessing every complaint, but with scant other regulation governing crypto assets, and so many cries of foul springing up across social media in particular, it’s becoming an increasingly difficult play to monitor.
“It has banned Arsenal Football Club’s posts on Facebook and its website which promoted ‘fan’ tokens as they took advantage of consumers’ inexperience in cryptoassets and misled consumers by not making it clear that these non-fungible tokens (NFTs) had to be bought using another cryptocurrency.
“NFTs which have been described as modern day trading cards are seen as valuable streams of fresh revenue for football clubs. Some individual non fungible tokens have sold for millions of dollars, as a bubble of speculation has blown up in the crypto Wild West, and the art, music and gaming industries have scrambled to start playing the game.
“There is a risk that the initial frenzy of interest in many of today’s NFTs will wane, and the assets could end up being almost worthless, in the same way as once sought after CDs, vinyl or even popular football players have ended up in the bargain bin.’’
