Cryptocurrency: Man recalls friend losing £50,000 due to scam
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Watchdog the Advertising Standards Authority (ASA) claimed the adverts: “encouraged consumers to engage in such a high-risk investment without consideration and trivialised what was a serious and potentially costly financial decision.” Arsenal’s token is supported by a partnership with platform Socios which is owned by cryptocurrency issuer Chiliz. Arsenal had placed adverts on Facebook and its website explaining the $AFC Fan Token and the benefits it offered such as allowing fans to vote on decisions including which songs were played after matches. The Facebook post also included a video featuring players Ben White, Calum Chambers and Kieran Tierney.
Arsenal had argued that the Fan Tokens were not promoted as financial products or investments and instead were ‘utility tokens’ to encourage fan participation.
The club also argued the ASA’s complaint over lack of a warning on capital gains tax implications was not required by law.
The ASA however have pointed out that the fan token could only be purchased using another cryptocurrency, Chiliz.
The watchdog argued that this also amounted to advertising a cryptocurrency and consumers would need information on this in order to make an informed decision.
Arsenal has now been told it must ensure future ads do not: “Trivialise investment in cryptoassets and did not irresponsibly take advantage of consumers’ lack of experience or credulity.”
In particular the club must make clear that capital gains tax could be due on any profits from cryptoassets and make it sufficiently clear that the value on investments may go up or down.
They were also told to make it clear that Fan Tokens were a type of cryptoasset and required another cryptocurrency to purchase.
Arsenal has said it will seek an Independent Review of the ruling to get greater clarity on the ASA’s position.
A spokesperson added: “We take our responsibilities with regard to marketing to our fans very seriously.
“We carefully considered the communications to fans regarding our promotions and provided information regarding financial risks.”
The ASA has begun a crackdown on adverts for cryptocurrencies and non-fungible tokens (NFTs) saying it was now on “red alert”.
In the last week it also took action against a Coinbase Europe ad it described as “misleading”.
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In another ruling today it instructed money transfer service Skrill to remove an advert for failing to illustrate the risk of investing in cryptocurrencies.
Arsenal is not the only club to issue its own fan token.
Socios has also partnered with other British clubs such as Everton, Leeds and Manchester City.
Earlier this month Socios told the BBC it had sold over $270m (£202.59) worth of tokens through its app with partnerships also in major European clubs such as Barcelona and Juventus.
Express.co.uk has contacted Chiliz for further comment.
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