Cryptocurrency Fan Tokens Rise in Popularity

In the last few years, fan tokens have become very popular. They allow sports fans to engage with and have memorable encounters with their favorite teams. They also offer sports teams the opportunity to monetize their fan bases, providing a source of income apart from ticket and retail sales. These tokens give more utility to cryptocurrency assets, perhaps different from invest on NBA games or NFL Odds.

The Golden State Warriors, Barcelona, Manchester City, Aston Martin Cognizant Formula 1 team, and many more are just a few of the prominent sports organizations that now have fan tokens to their names. Additionally, the Chiliz blockchain powers all of these tokens. 

Chiliz was introduced in late 2016. Sports organizations may collaborate with the network to design fan tokens that are unique to their club. A fan interaction and incentives program based on the Chiliz network, Socios, lists these fan tokens. After that, users from all around the globe may buy these tokens using CHZ, the Chiliz network’s native coin. 

Arsenal Crypto Ads Banned for “Misleading” Info 

Arsenal Football Club has had two advertisements for its crypto-based fan token program banned by Britain’s Advertising Standards Authority (ASA). It was determined that the advertisements misled supporters about the dangers associated with investing in cryptocurrencies. 

According to the ASA, the club did not make it sufficiently known that the value of investments in the tokens may go up or down. In addition, it did make it sufficiently evident that the crypto assets were uncontrolled. 

The ASA issued its second verdict against Arsenal after the club filed an appeal against an earlier decision against the organization in the previous year. Arsenal’s fan token plan enables supporters to purchase non-fungible tokens (NFT) via Socios. 

In exchange for the token, supporters are granted voting rights on club decisions in exchange for the token, which they must purchase using the cryptocurrency Chiliz. The verdict by the ASA, however, confirmed the previous conclusion of the watchdog that the advertisements, one of which appeared on Arsenal’s website and the other on Facebook, were deceptive. 

The ASA initially prohibited the posts from being published on Arsenal’s website and Facebook page in late 2021. At the time, it stated that the club had deceived its supporters “over the risk of investment and not making it clear that the ‘token’ was a crypto asset.” 

It was argued that the advertising “trivialized investing in crypto assets and took advantage of consumers’ inexperience or naivety” by omitting to include danger warnings about crypto as an investment class. This was due to the fact that the ads did not carry risk warnings regarding said assets. 

Crypto Sponsorships Grab Hold

In the last few years, cryptocurrency has spread like wildfire across the world of soccer. It has reached the point that Premier League teams like Manchester City and Wolves have announced substantial shirt sponsor relationships with crypto companies OKX and Astropay, respectively. 

Cristiano Ronaldo, the star player for Manchester United, signed a sponsorship arrangement with Binance in June, despite the crisis that was shaking the cryptocurrency industry at the time. Ronaldo did this because of the fact that Binance is the biggest cryptocurrency exchange in the world. The Football Association is looking for businesses to collaborate with on NFT initiatives for its national teams. 

On the other hand, fan token schemes have proved to be an especially problematic issue since they involve teams selling NFTs for pictures of iconic athletic events to fans in exchange for bitcoin. The value of crypto assets and tokens plummeted in May and June, shocking everyone. As a result, many retail investors have been left holding the bag after suffering significant losses. 

The fluctuations in crypto prices have caused frustration among some sports fans and calls for greater responsibility. For example, Tim Payton, the head of the Arsenal Supporters Trust, stated in an interview with The Times that soccer clubs ought to have a “greater duty-of-care responsibility toward their fans.” He also suggested that cryptocurrencies ought to be subject to more stringent regulation.

Related Articles

Back to top button