In 2022 the Advertising Standards Authority (ASA) will be focussing its rulings on cryptoassets, which shall include fan tokens, having declared misleading crypto marketing as a 'red alert' priority.
Last week Papa John’s, Coinbase, Kraken and eToro faced the wrath of the ASA for crypto marketing. This week, it was Arsenal.
The following sets out the high-level steps that football clubs should consider when promoting fan tokens:
- Fan tokens i.e. 'utility tokens' are categorised by the Financial Conduct Authority as cryptoassets and are considered by the ASA to be a form of high risk investment.
- Consequently, in any marketing communications relating to fan tokens, the advertisements must:
- promote the fan tokens as cryptoassets, investments and financial products;
- clearly state that the value of investments are variable and, unless guaranteed, could go down as well as up;
- clearly state that cryptoassets are a volatile investment subject to frequent change and one that could potentially lead to large losses;
- clearly state that cryptoassets are unregulated in the UK;
- not omit material information such as the need to purchase fan tokens using a cryptocurrency; and
- clearly inform consumers of the potential Capital Gains Tax charges as a result of any investment gains in cryptoassets.
These risks need to be highlighted prominently and not be hidden at the bottom of the Ad.
What if clubs distribute free fan tokens which do not incur a fee?
As fans are required to sign up to claim this free token through a crypto-exchange account, which provide users with the potential to buy and trade more tokens in the future, the advertisement of such tokens will remain subject to greater scrutiny and the above rules are likely to apply.
In 2022 the Advertising Standards Authority will be focussing its rulings on cryptoassets, which shall include fan tokens, having declared misleading crypto marketing as a “red alert” priority.