The Advertising Standards Authority issued its ruling
Wednesday on ads for the $AFC Fan Token that appeared on the north London
football club's website and on Facebook. The Premier League team launched its
first ad for the Arsenal Fan Token on August 6, then put up another ad on
Facebook on August 12 as the token went live.
The ads "were irresponsible because they took advantage
of consumers' inexperience or credulity and trivialised investment in
cryptoassets," said the ASA. It also determined that the ads were
misleading because they failed to illustrate the risk of the investment.
The Facebook ad was
"misleading" because it didn't make clear the Fan Token was a
cryptoasset that could only be obtained by opening an account and exchanging
with another cryptocurrency that had to be purchased, the agency said.
Arsenal had teamed up with fan-engagement platform Socios to
launch $AFC Fan Tokens which could be purchased on the Socios.com app using the
Chillz cryptocurrency. Arsenal said the token gives fans certain voting rights
on official club decisions and the opportunity to earn real-life and digital
club-related benefits and experiences.
Arsenal said, according to the agency, that its Fan Tokens
were utility tokens aimed at encouraging fan participation, therefore rendering
them materially different from cryptocurrencies which are virtual currencies
used as a means of payment.
The first ad from Arsenal did include text indicating the
value of Fan Tokens could go down and that consumers could lose some or all of
their invested money. "However, that risk warning was at the bottom of
[the] ad and we considered it was possible for consumers to engage further
without seeing it," the agency said.
"The ads must not appear again in the form complained
about," the ASA said in its ruling. It said it told Arsenal to ensure,
among other things, that future ads didn't trivialize investment in
cryptoassets and that they made sufficiently clear the value of crypto
investments was variable.
"We take our responsibilities with regard to marketing
to our fans very seriously," said Arsenal, according to a BBC News report.
"We carefully considered the communications to fans regarding our
promotions and provided information regarding financial risks."
The club will seek an independent review of the ASA's ruling
for greater clarity on the agency's position, the BBC reported.
The $AFC Fan Token rose 0.7% during Wednesday's session to
$3.42, according to CoinGecko. CoinGecko's track of the price goes back to late
October and the token then traded around $7.42.
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