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British advertising watchdog slams Arsenal for misleading crypto ads

The UK advertising regulator has slammed Arsenal Football Club for promoting crypto assets without warning fans of the potential risks involved.

The Advertising Standards Agency (ASA) banned cryptocurrency ads promoting Arsenal’s fan tokens and said they must not appear again. The agency flagged two promotions from Arsenal’s $AFC for irresponsibly exploiting consumer ignorance and failing to clarify the risk of crypto investing.

Specifically, the ASA ruled that content on Arsenal’s official website titled “$AFC Fan Token: Everything you need to know” misled customers about the risks of investing in cryptocurrencies.

“We have directed Arsenal Football Club to ensure they make it sufficiently clear that the value of investments in paid fan tokens are variable and, as crypto assets, are unregulated,” the ASA said in the decision.

The second breach, according to the watchdog, centered on a Facebook post on the club’s official page. It reads, “$AFC is live now,” and asks fans, “What song do you want to hear if we win? Download the Socios app to get your token and vote.

The Advertising Standards Authority (ASA) argued that this content “trivializes” a “serious and potentially costly financial decision”.

The ASA acknowledged that the ads did not promote the fan tokens as an investment or financial product. However, it said the product was a crypto asset regardless of how it was advertised, and the ads did not provide any information that capital gains tax might be payable on profits made from investing in crypto assets.

Manchester City was the first company to introduce a fan token

“Hence, we have concluded that the ads were irresponsible and in violation of the code because the ads trivialized investments in cryptoassets and took advantage of consumer inexperience or gullibility by not clarifying that CGT would be payable on gains from investments could,” we concluded.

An Arsenal spokesman said they would seek an independent review of the verdict, adding the club had provided information on the financial risks.

The north London club became the second Premier League club to sign up with blockchain provider Chiliz to offer crypto fan tokens on the Socios.com app. Manchester City were the first Premier League club to announce they would launch a fan token on the Chiliz platform in March.

Sports fan tokens are utility tokens that offer users of a blockchain platform exclusive access to voting rights, VIP rewards, AR features, superfan recognition and promotions.

The price of Sports Fan Tokens is not necessarily tied to match results or team performance. Rather, the digital assets are often dependent on the overall utility of the tokens and the demand for them by crypto investors or fans.

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