A group of UK Members of Parliament (MPs) has warned that cryptocurrency products associated with football clubs are endangering supporters financially and potentially damaging the reputations of clubs. The report by the MPs specifically highlighted the risks associated with “fan tokens” and non-fungible tokens (NFTs) within the cryptocurrency space.
In recent years, many top football clubs and players have endorsed cryptocurrency products. However, the report emphasizes that the value of tokens such as Bitcoin and Ethereum has declined, which exposes cryptocurrency traders to significant losses. The risks associated with NFTs were also strongly criticized due to their inherent volatility. Fans who invest in NFTs may face financial harm as a result.
Dame Caroline Dinenage MP, Chair of the Culture, Media, and Sport Committee, stated that clubs are promoting volatile cryptoasset schemes to extract additional money from loyal supporters. She added that these schemes often promise privileges and perks that do not materialize, and fan token programs should not be seen as a substitute for genuine engagement with supporters.
The report comes at a time when several Premier League clubs, including Tottenham Hotspur, Arsenal, Aston Villa, Crystal Palace, and Everton, have signed deals with “fan token companies” such as Socios. Tottenham’s partnership with Socios, described as a rewards and engagement platform, would allow fans to participate in club-related polls, predictions, and competitions to earn points that can unlock rewards and unique experiences.
However, the MPs’ report dismisses the use of fan tokens for engagement, criticizing their price volatility and raising concerns from fan groups. The Tottenham Hotspur Supporters Trust has strongly opposed the Socios deal.
Tottenham, on the other hand, has defended their fan tokens, stating that they enhance the benefits of their existing membership scheme and help generate additional recurring revenue for football activities. Socios, in response to the criticism, has claimed that fan tokens provide one-of-a-kind experiences to fans supporting their clubs and are not intended as a means to make money.
The report by the UK MPs brings attention to the potential pitfalls of cryptocurrency products associated with football clubs. Supporters need to be cautious when engaging with these platforms and fully understand the risks involved in trading cryptocurrencies and investing in NFTs. Clubs, too, must prioritize genuine supporter engagement instead of relying on fan tokens as a revenue stream.