The UK's advertising regulator, the Advertising Standards Authority (ASA), has banned two advertisements by the Premier League football team, Arsenal, for its cryptocurrency-based fan token program.
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The ASA felt that the advertisements for $ AFC fan tokens were misleading fans about the risks of investing in cryptocurrencies. The first announcement published on August 6, 2021 described the token and how it could be used within the Socios app.
Six days later, a second announcement was uploaded to Facebook featuring Arsenal footballers Ben White, Calum Chambers and Kieran Tierney promoting the token, along with text briefly describing $ AFC, the cryptocurrency Chilliz ($ CHZ), and l Socios app.
"He took advantage of the inexperience of consumers"
Despite an appeal filed after last year's complaint, the ASA confirmed its decision that the two advertisements were "misleading because they did not illustrate the risk of the investment" and "irresponsible because they took advantage of the inexperience or credulity of consumers and they trivialized the commitment and investment in cryptocurrencies ".
Arsenal, which have placed behind north London rivals Tottenham Hotspur for the past six seasons, initially challenged the decision, arguing that the warnings were sufficient and that the public was savvy about cryptocurrencies. The club also tried to argue that there was no regulatory basis for including information regarding capital gains taxes incurred from trading the tokens, despite the fact that they are crypto assets and, as such, subject to such rules.
However, the complaint was upheld and Arsenal's appeal was dismissed. The ASA said the Arsenal commercial was misleading "because it did not clarify that the tokens were cryptocurrencies, which could only be obtained by opening a cryptocurrency exchange account and, in the case of paid fan tokens, required purchase. of another cryptocurrency ".
The UK advertising regulator has ruled that advertisements "must no longer appear in the contested form".
The ASA also warned Arsenal:
- to clarify that investments with paid fan tokens are subject to market volatility and are unregulated cryptocurrencies.
- not to deceive consumers by omitting material such as the need to open a cryptocurrency exchange account and to purchase various cryptocurrencies to purchase the tokens.
- making sure future announcements are not trivialized by omitting risk warnings and exploiting consumers' lack of experience with cryptocurrencies.
