Who: The Advertising Standards Authority (ASA) and Arsenal Football Club plc
Where: United Kingdom
When: 13 April 2022 (updated 10 August 2022)
Law stated as at: 7 September 2022
The UK’s Advertising Standards Authority has upheld a ruling against Arsenal’s promotion of fan tokens. Arsenal posted an advert promoting the $AFC fan token on one of their social media pages. This was accompanied by a page on the Arsenal website which included information explaining what the fan token was and the benefits it offered to owners.
The fan tokens were marketed to Arsenal supporters as an opportunity to deepen their engagement with the club. The North London outfit explained that there were two types of fan tokens: a free, non-transferable and non-tradable version of the Fan Token; and a paid for, transferable and tradable version of the Fan Token, which allowed owners to vote on club matters. In order to buy the tokens, consumers needed to purchase the cryptocurrency Cliliz. In the Arsenal website ad, consumers were made aware that the future value of the fan tokens would be dependent on supply and demand and could go up as well as down – a warning that fans could lose some or all of the money they invested in the cryptocurrency.
The ASA challenged whether the ads were misleading because they failed to properly highlight the risks of the investment. The regulator also challenged whether the social media ad made it clear that the fan tokens were crypto assets; and both ads were irresponsible as they took advantage of consumers’ inexperience with crypto assets.
Arsenal responded to say that the Arsenal website page was designed to educate fans about the benefits of fan tokens. The football club said that they included a warning about purchasing the cryptocurrency Chiliz in the body of the Arsenal website page and a warning that crypto assets were not regulated in the UK. The Premier League club held the belief that the fan tokens were promoted responsibly as they reminded fans that they only needed one token to vote in club decisions and that they should only purchase what they could afford.
The ASA acknowledged that the Arsenal website ad did contain some information about the cryptocurrency and the risks involved with investing. However, there was no guarantee that those who engaged with the social media ad had seen the Arsenal website ad, and the social media ad did not include any warning about the risks associated with the fan tokens. Therefore, the ASA concluded that the ads were misleading. The social media ad did not include any risk warnings, while, in the Website ad, these were not sufficient in stating that the fan tokens were crypto assets that were unregulated in the UK.
Why this matters:
The ASA ordered that the ads must not appear again in their current forms. Arsenal were told to ensure that they make clear the value of investments in the fan tokens could vary and that crypto assets were unregulated in the UK.
Advertisers should ensure that similar ads do not trivialise the risks of investment in crypto assets, and appropriate risk warnings should be included. Material information should be included in ads so as not to mislead consumers.