Arsenal FC is now prohibited from advertising its fan tokens following a ban by the regulator. Meanwhile, crypto companies continue to seek proximity to the glitzy football world as sponsors.
The UK's Advertising Standards Authority (ASA) has banned two ads by Arsenal Football Club for its crypto-based fan token program, saying they misled fans about the risks of investing in cryptocurrencies. Talk about getting a red card.
According to a report by «Financial News» (article behind paywall), the regulator complained that the football club had not made it clear that the value of investments in the tokens could rise or fall and that the crypto investments were not regulated.
Say it With an NFT
Arsenal's fan token program allows the team's loyalists to buy non-fungible tokens using the Chiliz cryptocurrency via NFT company Socios. Owning a token confers voting rights in club decisions.
Such programs have their pitfalls, however, such as when clubs sell NFTs to fans with images of famous sporting moments in exchange for cryptocurrency. As the value of cryptocurrencies and tokens crashed dramatically rate in May and June, many ordinary retail investors suffered heavy losses.
Ronaldo is in on the Action
Cryptocurrencies entered the football world at a brisk pace in recent years. For example, two Premier League clubs, Manchester City and Wolverhampton Wanderers, have announced major jersey sponsorship partnerships with OKX and Astropay.
Even Manchester United star Cristiano Ronaldo plunged into the world of cryptocurrencies in June, despite the crisis in the industry, signing a sponsorship deal with the world's largest crypto exchange Binance.
Show Me the Money
However, with the meltdown in crypto markets, sponsors can also become unreliable. Inter Milan entered into a partnership with Digitalbits in early July in which the blockchain company was to pay the Italian football club a total of 85 million euros ($87.7 million) over four years.
But there were delays with the first transfer. According to media reports, Inter Milan could now take legal action against its main sponsor and remove the company's lettering from its jerseys.
