Arsenal have been given a second warning by the Advertising Standards Authority after marketing materials about partner Socios, who sell unregulated non-fungible tokens (NFTs) in the guise of a fan engagement platform, were again deemed ‘misleading’.
Originally reprimanded in December, the Gunners lodged an appeal only for the ASA to uphold the original complaint, albeit on revised grounds.
Arsenal’s relationship with Socios started in July 2021 and it immediately drew the ire of the Arsenal Supporters’ Trust who were concerned the club weren’t being upfront about its partner’s products being an unregulated cryptocurrency.
In November, there followed a big email marketing campaign to get supporters to claim a “free $AFC Fan Token” giving people “voting rights on official club decisions, the opportunity to earn VIP real-life experiences, and unrivalled access to digital club-related events”.
It was materials relating to this promotion, posted on Facebook and the club’s website, that garnered the attention of the ASA.
Their original rebuke was fulsome:
1. ads (a) and (b) were misleading because they failed to illustrate the risk of the investment;
2. ad (a) was misleading because it did not make clear that the tokens were cryptoassets, which could only be obtained by opening a cryptoassets exchange account, and in the case of paid-for fan tokens, required the purchase of another cryptocurrency; and
3. ads (a) and (b) were irresponsible because they took advantage of consumers’ inexperience or credulity and trivialised engaging with and investing in cryptoassets.
The ASA yesterday explained in lengthy detail why they feel they were right to call out the club for its promotion of Socios. You can read the full ruling here.
And this is the action they’ve told Arsenal to take:
“The ads must not appear again in the form complained about. We told Arsenal Football Club plc to ensure that they made sufficiently clear that the value of investments in paid-for Fan Tokens was variable and as cryptoassets they were unregulated. We also told them to ensure that they did not mislead consumers by omitting material information in their ads, including that free fan tokens would require a consumer to open up a cryptoassets exchange account and that paid-for Fan Tokens were a cryptoasset that had to be bought using another cryptocurrency. We told them to ensure that their future ads did not trivialise investment in cryptoassets by omitting appropriate and prominent risk warnings and did not irresponsibly take advantage of consumers’ lack of experience or credulity by not making clear that CGT could be due on cryptoasset profits.”
Well done to the ASA for forcing Arsenal to take responsibility (again) for what it's endorsing. Hopefully we are approaching the beginning of the end of the "cigarettes are great for your lungs" era of crypto marketing in football. https://t.co/0kqTBxn2kc pic.twitter.com/gVCJ98FyFB
— Martin Calladine (@uglygame) August 10, 2022
Despite a huge crash in the crypto market this year – one that has earned plenty of headlines and ruined many lives – Arsenal continues to actively promote Socios, albeit with lengthier disclaimers in place. What you get in return on the ‘fan engagement’ front is genuinely pitiful; most recently a chance to vote on last season’s best piece of skill by an Arsenal player.
Socios and other crypto products have become ubiquitous across European football of late, but there are those – such as @uglygame on Twitter – who consistently raise issues that should concern their partner clubs.
As Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, also says:
“This ruling is another stark reminder that people should resist ploughing money into schemes they don’t fully understand and should only speculate with money they can afford to lose. It also highlights the need to speed up the plan to give the city watchdog – the Financial Conduct Authority more powers to regulate the crypto industry, given the government’s vision to make the UK a crypto hub.”