Arsenal adverts promoting fan token company Socios have been labelled “misleading” and “irresponsible” by Britian’s advertising watchdog.
The Advertising Standards Agency (ASA) said the adverts, one on Facebook and one on the club’s website, had failed to make clear the tokens had to be bought with a cryptocurrency, had taken advantage of fans' inexperience, and did not warn of the risk of trading crypto.
A December ruling against the promotions was upheld following Arsenal’s appeal in a verdict released on Wednesday.
Digital fan token firm Socios has deals with six Premier League clubs, including champions Manchester City, as well as Barcelona, Juventus, Paris Saint-Germain and a host of top European teams.
Fan tokens allow football supporters and other sports clubs to vote on minor decisions such as songs played at matches after a goal is scored, or images used on social media.
The tokens, which can be traded on exchanges like other cryptocurrencies, are prone to wild swings in price and often have little connection to on-field performance.
In a statement to the ASA, Arsenal argued that the polls were “not a gimmick or a way to promote fan tokens as an investment opportunity, the polls were actually the purpose and essence of the fan tokens”.
The club added Socios was well known in the football community as a cryptocurrency platform which meant viewers of the ads would understand that fan tokens had to be bought with cryptocurrency. The ASA upheld all sections of its original December ruling.
An Arsenal statement read: “We are disappointed by the ASA’s decision to uphold their ruling following our appeal.
“We have complied with the ASA’s guidance since the original ruling, and we will continue to comply in our future communications in this fast-moving area.
“We have been clear throughout that we take our responsibilities with regard to marketing to our supporters very seriously. In this situation we carefully considered the communications to supporters regarding our promotions and provided information regarding financial risks.”
The organisation said the club “did not include any risk warning making consumers aware that paid-for Fan Tokens were cryptoassets which were unregulated in the UK and cryptoassets could go down as well as up”.
It added that the adverts were misleading because they did not make clear the tokens were cryptoassets which were not regulated in Britain, and had to be purchased with another cryptocurrency.
“[The adverts] were irresponsible because they took advantage of consumers' inexperience or credulity and trivialised engaging with and investing in cryptoassets," the ASA said. “The ads must not appear again in the form complained about.”
Additional reporting by Reuters.