Cryptocurrency products linked to football are “putting supporters at risk of financial harm and potentially damaging the reputations of clubs” according to a report by a group of UK MPs which singled out “fan tokens” for particular criticism.
Many top clubs and players have promoted cryptocurrency products over the past couple of years but tokens like Bitcoin and Ethereum have declined in value, potentially exposing those who trade cryptocurrency to significant losses.
The report also strongly criticised non-fungible tokens (NFTs) — unique digital assets that can be bought and sold using cryptocurrency — saying they “have proven to be inherently risky for fans who invest in them”.
“In the world of sport, clubs are promoting volatile cryptoasset schemes to extract additional money from loyal supporters, often with promises of privileges and perks that fails to materialise,” said Dame Caroline Dinenage MP, Chair of the Culture, Media and Sport Committee.
“Fan token schemes must not be used as a substitute for meaningful engagement with supporters.”
Tottenham Hotspur announced a deal with “fan token company” Socios just last month, joining other Premier League clubs Arsenal, Aston Villa, Crystal Palace and Everton.
A Spurs statement described Socios as “a rewards and engagement platform” and said the deal will allow fans to “engage in club-related polls, predictors, and competitions, through which points can be gained to unlock new rewards and experiences”.
The MPs’ report was, however, scathing about the use of fan tokens for “engagement”.
“The use of fan tokens in football do not count as an acceptable measure of engagement in the forthcoming regulation of the game,” the report said. “The Committee highlights the price volatility of such tokens and reservations from fan groups.”
The Tottenham Hotspur Supporters Trust has strongly opposed the Socios deal.
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Tottenham said their fan tokens would “build on the many benefits of our existing membership scheme”, adding that the partnership was “another example of how the club is working to create additional recurring sources of revenue to reinvest in our football activities”.
Socios said that “fans across the world are being rewarded with one-of-a-kind experiences simply by showing support for their club through fan tokens”.
The company previously told The Athletic: “We don’t promote fan tokens as a way to make money, but as a tool to engage with sport organisations in ways that were simply unimaginable only a few years ago.”
(Photo: Leon Neal/Getty Images)
