The Advertising Standards Authority (ASA) said adverts on Arsenal’s Facebook page and website “encouraged consumers to engage in such a high risk investment without consideration and trivialised what was a serious and potentially costly financial decision.”
The advert from August encouraged fans of the club to buy “fan tokens”, which allow people to vote on issues related to the club such as what songs to play after a win. The tokens, which use the same blockchain technology as cryptocurrencies like bitcoin, are purchased using a crypto called Chiliz.
Arsenal argued that its fan tokens were so-called “utility” cryptos, rather than investments, and therefore the club wasn’t encouraging people to make any sort of investment. It added that a complaint from the ASA that Arsenal failed the flag possible capital gains tax implications was unreasonable as this was not required by law.
The watchdog disagreed with these arguments, saying the fact fan tokens could only be bought using cryptocurrency meant Arsenal was in effect advertising cryptocurrency. And while the fan tokens do offer utility, they can also be traded. The ASA said the failure to mention capital gains was covered by rules requiring advertisers to make risks clear.
Arsenal has been ordered not to run the ads again in their current form, while future ads must not “trivialise investment in cryptoassets” or “irresponsibly take advantage of consumers’ lack of experience or credulity.”
A spokesperson for the club 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.”
The ruling comes a week after the ASA said crypto adverts were a “red alert priority issue”. The watchdog is concerned that consumers unaware of the risks could stumble into huge losses.
Arsenal’s fan token is the product of a partnership with Socios, a Malta-based cryptocurrency company that issues Chiliz. Socios has partnered with other major football teams including Barcelona, Juventus and PSG.
Chiliz was contacted for comment.