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Football Cryptocurrency for Manchester City and Arsenal slammed for ‘frauding’ fans as token value plummets

The CRYPTOCURRENCY tokens offered by football clubs such as Arsenal and Manchester City, Barcelona and AC Milan have been branded by experts as a ploy to expose investors.

Many football clubs have jumped on the trend of offering blockchain-powered fan tokens and crypto partnerships – but our investigation shows that the value has dropped significantly in recent years. recent month.

How some major fan tokens have performed since launch

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How some major fan tokens have performed since launch
Fan tokens like Arsenal's AFC coin have become a popular way to connect with supporters

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Fan tokens like Arsenal’s AFC coin have become a popular way to connect with supportersCredit: Instagram @sociosdotcom

The main player in this space is Socios, which works with over 50 football clubs including Arsenal, Manchester City, Barcelona and AC Milan to issue fan tokens and provide a platform for people Fans buy and sell their shares.

The first token is usually free for loyal fans with additional ones costing £2 each initially.

The more tokens you have, the more “voting power” you have – but to buy more you need to register Socios platform’s own cryptocurrency called Chiliz (CHZ).

Many fan tokens have declined in value since their launch, and while Socios says these are not investments, there is still a secondary market where they can be traded.

Fans from all over the world have complained on social media about the losses.

One Arsenal fan revealed on Twitter that he buys the club’s fan card to show support but describes it as a “trash can”.

The response from a Turkish Twitter user to a post by Socios founder Alexandre Dreyfus said: “You said 2022 will be the year of the fan token. My loss is 60%. “

One Lazio fan said they were very disappointed after buying for $22 and selling for $7.

Investment experts warn these tokens are “defrauding” fans who may not be aware of the risks of buying crypto to access the token.

Independent investment commentator Adrian Lowcock told The Sun: “Giving votes through cryptocurrency seems extremely inappropriate.

“Cyrptos are very complex, and many of them are extremely volatile.

“Add a sporting element to the mix and it’s a recipe for disaster.

“Most fans will jump at the opportunity to engage with their clubs and share their views – their focus is on the sporting element and are unlikely to fully understand the risks and the rewards that cryptocurrencies can bring.”

Another risk arose this week after the Argentine football association, which already has a fan token deal with Socios, unveiled a new backing coin with rival exchange Binance.

Socios said it will sue for breach of contract.

But this presents another risk to fan tokens as clubs can transfer one brand to another, rendering your holdings worthless.

How fan tokens work

Fan tokens are one of the newest forms of cryptocurrency.

They allow supporters to feel more engaged with their team by allowing them to own a branded virtual token and participate in votes on how the club is run.

Key provider Socios has partnerships in football, motorsport, basketball and tennis and says it has more than 1.3 million active users around the world.

The idea is that fans, usually registered club members or season ticket holders, receive a dedicated token that can be used to vote on polls like car design team bus or a song to play when someone scores.

How to give tokens to fans

More than 50 football teams have partnered with Socios to issue fan cards.

For example, Arsenal fans are given a free non-tradable token when the AFC token first launches in October 2021.

Token holders can vote through the Socios app on the team’s motto and toolkit design, and regular users can earn rewards like player meetings and VIP access

Like other fan tokens, Arsenal’s has a separate page on the Socios website that says fans can participate in rewards with just one token, but adds: “some parts unique rewards can claim more than one.”

Arsenal Supporters Trust (AST) questioned the AFC token launch with Socios when it was first announced in August 2021 and called for more risk warning on crypto as an operation. not controlled.

The AST said: “Cryptocurrency is a high-risk and unknown activity and it is likely that this partnership has a negative impact on Arsenal’s reputation and the financial well-being of its supporters. for them.”

It is understood that Arsenal changed the wording in response

Arsenal fan Daniel Keen, a writer for the blog She Wore and a crypto investor, said he is not interested in fan tokens as they introduce people to the crypto market. death that they do not fully understand.

He told The Sun: ‘It took me six months before investing in crypto for me to know what I was getting into.

“If I go in and open an eToro account, I have to read the questionnaire and the terms and conditions before investing, but there doesn’t seem to be any due diligence.

“Do I have the option to invest in crypto but this forces people who may not want to invest.”

Some fan groups have sought to resist.

West Ham United fans tried to get the club to cancel its partnership with Socios in 2019.

The West Ham United Independent Supporters’ Association described the partnership as a “scheme to exploit fan opinion”.

The Football Supporters’ Association said it disliked efforts to “monetize fan interaction that leagues and clubs have pledged to do for free.”

Cryptocurrencies or cryptocurrencies are labeled as high-risk and unregulated investments.

The Financial Conduct Authority (FCA) has warned that Investing in cryptocurrencies is risky and consumers should be prepared to lose all their money.

The CHZ cryptocurrency is described as a utility token that is only used to access products or services, and the FCA has previously said in policy documents that the virtual currency is outside of its regulation. .

Socios is registered and regulated in Estonia but told The Sun it has received legal advice that it does not require permission from the UK regulator.

This is because utility tokens are technically not considered investment assets and should only be used to access a product or service.

However, investors can still buy CHZ on exchanges like Binance and CoinTiger, while fan tokens can be bought and sold through the Socios secondary market.

Prices, like with all cryptocurrencies, can fluctuate.

Some fans may make a profit if they sell fan tokens but there is no guarantee as the value has proven to be unpredictable.

How the token value has plummeted

Anyone buying more tokens, such as if they wanted to have a bigger influence on votes, saw an increase in value of $6 when the AFC token first appeared in October 2021 before dropped to $2 earlier this year, according to CoinMarketCap data.

Similarly, Premier League leaders Manchester City’s fan token launched at $22.9 in May 2021 and peaked around $33 but is now worth close to more than 8 dollars.

The Barcelona Fan Token was worth $6.3 when it first launched in 2020 and grew to almost $55 last year but is now worth $5.7.

Similarly, the Paris Saint Germain fan token was worth $5.6 when it launched in 2020 and rose above $55 last year before dropping to around $12.4.

The Leeds United fan token hit $4.7 when it first launched in November 2021 and skyrocketed to $20.6 late last year. It’s currently worth $2.88, according to CoinMarketCap.

The AC Milan fan token went from $6.4 to $19 when it first launched in early 2021 but is now worth $3.83.

Last year, The Sun asked Arsenal if they were worried about giving fans exposure to cryptocurrencies.

An Arsenal spokesman emphasized that Arsenal members received a free token when it launched and there was no requirement to spend any money.

A spokesperson said: “We have been clear in all communications regarding Socios.com that fan tokens are a means of engaging with the club, voting on visits Discover and access many benefits.

“One fan token is enough to access these benefits, and we advise fans not to spend more on fan tokens than they can afford. ”

A spokesman for the club Leeds United said: “We take our responsibility towards fan marketing very seriously.

“We carefully reviewed the fan communications regarding the $LUFC fan token and provided information regarding financial risks.

“All members and season 18+ ticket holders are provided with one free token, which is all they need to participate in polls, contests and other activities on the Internet. Socios app.”

Manchester City, Barcelona, ​​PSG and AC Milan did not respond to requests for comment.

Cryptos and football clubs

This comes as more and more clubs join crypto companies as trading platforms.

Brentford has announced cryptocurrency exchange CoinJar as a “platinum partner” in 2021, while Manchester City ends a partnership with a little-known crypto startup called 3Key Technologies. earlier this week after just two months when its supporters had little online presence.

Critics question whether unregulated exchanges and cryptocurrencies should be tied to sports where they can be seen by underage or vulnerable fans.

The charity GamCare, which runs the National Gambling Helpline, has taken calls from people who have recovered from gambling problems and have registered on self-exclusion sites, but are instead investing invest in cryptocurrencies.

Its helpline has received many calls about people already trading unregulated higher risk options like cryptocurrencies.

Socios asserts that those under the age of 18 are restricted from buying fan tokens, and added that they should not be considered cryptocurrencies.

Alexandre Dreyfus, CEO of Socios, told The Sun: “The fan token are digital utility assets.

“Fans only use our digital currency CHZ to receive fan tokens. There is absolutely no exposure to other cryptocurrencies on Socios.com.

“It is certainly true that cryptocurrencies are becoming more popular. You just have to look at the wallet services offered by PayPal, Revolut and many other major banking and payment services to see it.

“But, that is not what we are aiming for.

“We are about to use blockchain technology to build closer relationships between fans and clubs on a global scale.”

The FCA did not respond to repeated requests for comment.

How to give AFC tokens to Arsenal fans

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How to give AFC tokens to Arsenal fansCredit: Socios
Utah man loses £278k in crypto scam after being scammed by fake trading app

https://www.thesun.co.uk/money/17252867/questions-raised-about-football-and-crypto/ Football Cryptocurrency for Manchester City and Arsenal slammed for ‘frauding’ fans as token value plummets

JACLYN DIAZ

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