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    Thursday, December 23, 2021

    UK Watchdog Bans 'Misleading' Arsenal Ads for Crypto Fan Tokens

    The UK's advertisement watchdog has banned ads for soccer club Arsenal's fan token, calling the ads "irresponsible" in failing to highlight risks associated with cryptocurrencies.

    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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