Premier League clubs accused of exploiting fans as 17 of 20 clubs agree to cryptocurrency deals

Premier League teams have been accused of exploiting fan loyalty after a Mail on Sunday poll found that all but three clubs have done business with crypto companies.

Campaign groups have criticized parties such as West Ham and Southampton for seeking to monetize their interaction with supporters through relationships with “fan tokens” companies, which sell cryptocurrency in exchange for their role in the club’s small decisions.

Industry experts added that these business deals could replace soccer clubs’ highly lucrative relationship with gambling firms if the government’s proposed ban on betting advertisements comes into effect.

West Ham have come under fire for seeking to monetize their interactions with supporters through ties to “fan symbols” companies.

“Crypto-based fan-code partnerships either attempt to monetize trivial matters that can be easily resolved through online surveys of season ticket holders, or introduce financial barriers to genuine supporter participation,” a spokesperson for the Football Supporters Association said. “Not a good look.”

Manchester City were forced to put on hold a deal with a crypto company on Friday while Barcelona abandoned a similar contract altogether.

But 17 of the 20 clubs in the Premier League have one or more business deals with companies operating in the cryptocurrency sector, despite serious concerns about fan exploitation and potential crypto fraud.

Fans of West Ham, Leeds, and Southampton among others have recently protested against the crypto deals being discussed.

Southampton and Leeds fans have recently protested against the crypto deals being discussed

Southampton and Leeds fans have recently protested against the crypto deals being discussed

West Ham supporters have objected to a proposed association with Socios “Fan Token”, which sells tradable club digital tokens that allow owners to vote on small club issues such as the color of a coach’s scarf.

Tokens must be purchased using a cryptocurrency called Chiliz (or $CHZ), invented by Socios, which earns money when traded on their crypto platform.

West Ham listened to the protests and withdrew from the Socios deal, instead recently announcing crypto company Yield App as an official digital asset wealth management partner.

Leeds is now one of five Premier League clubs to benefit from Sosius fan icons along with Manchester City, Arsenal, Everton and Aston Villa, as well as dozens of sports teams globally.

Up to several million tokens are sold at any one time, usually for a few pounds each. Clubs get half the money, Sosius takes half. For amounts that can run into the millions, clubs offer some basic prizes, such as T-shirts and tickets. Socios arranges surveys and giveaways via an app.

“Nearly 100 of the largest sports organizations on the planet have agreed to become part of our network,” says Alexander Dreyfus, Socios founder and CEO. In our case, I was determined to offer something of great value to our partners and their fans.

When asked why cryptocurrency should be involved in buying fan tokens, rather than regular currency, he said:[It] It enables us to build an ecosystem and will continue to be the driving force of Socios.com.

Manchester City suspended a deal with a crypto company on Friday, which was announced just a week ago

Manchester City suspended a deal with a crypto company on Friday, which was announced just a week ago

West Ham, who announced their relationship with Yield in September, told fans: “The YIELD app allows its users to invest in digital assets and earn up to 20.5% annual interest at the touch of a button.” There’s no mention that users could lose all of their money, just as Socios doesn’t explain that fan tokens can fluctuate in value.

In September, Southampton announced their new official training group partner, www.learncrypto.com. Marketed as a “free educational platform” about cryptocurrencies, it is actually a pro-cryptocurrency site, telling users how to buy and trade cryptocurrencies. It is partially funded by Saints’ main sponsor, Sportsbet.io, who are heavily involved in the crypto industry.

When the deal was announced through the Southampton Twitter account, fans online responded with disgust. Please stop taking money from clearly suspicious businesses. Someone said: “The club loses another iota of its dignity and every time you do that. Another said: “I hope schemes like this will fall under the gambling sponsorship ban, just gambling by another name.”

Gambling sponsors are at the top of nine of the 20 Premier League shirts this season, contributing £63.25 million out of a total shirt total of £358.75 million in 2021-22. But with betting sponsors likely to be outlawed within years, sponsorship industry experts expect crypto products to replace them.

“Crypto could take over the gambling industry when the proposed gambling ban comes into effect,” says Charlie Bannister of sports marketing agency SGI. “My expectation is that as more clubs start moving away from gambling, more will turn towards cryptocurrency and fan tokens.”

Manchester City suspended their ‘regional partnership deal’ with crypto firm 3KEY on Friday, which was announced just a week ago.

It is unknown where 3KEY is based and the appointed CEOs lack any clear digital footprint. While City’s website previously boasted 3KEY “provides a suite of portfolio management tools,” 3KEY owner Oliver Chen said their product was “scheduled to launch in the coming months”.

Meanwhile, Barcelona was forced to give up a contract similar to Manchester City completely

Meanwhile, Barcelona have been forced to give up a contract similar to Manchester City completely

3KEY’s website makes claims of “150% average annual returns”, that “more than 10 projects” are in progress, and that they have “100% customer satisfaction” – although no product yet.

Manchester City refused to answer several questions about 3KEY before suspending the deal. “Further inquiries are now being made regarding 3Key,” a Citi spokesperson said.

City’s embarrassing turnaround came on the same day Barcelona finalized a deal with crypto firm Ownix ​​after its associated businessman, Moshe Hogg, was arrested on charges of sexual assault and cryptocurrency fraud. Hogg denied all these allegations.

Fan tokens and other crypto assets such as non-fungible tokens (NFTs) are among the many crypto products that are not regulated by the FCA. But in a recent speech, Charles Randall, president of the FCA, made it clear that buyers should be wary.

“There is no shortage of stories about people who have lost their savings by being tempted by delusions of get-rich-quick times, sometimes after listening to their favorite influencers, willing to betray the trust of their fans for a fee,” he said.

We at the Financial Conduct Authority (FCA) have repeatedly warned of the dangers of holding speculative tokens. These tokens are not regulated by the Financial Conduct Authority (FCA)… If you buy them, prepare to lose all your money.

Arsenal and Aston Villa are two of the five Premier League clubs to benefit from Sosius Fan Tokens

Arsenal and Aston Villa are two of the five Premier League clubs to benefit from Sosius Fan Tokens

Increasing numbers of footballers are marketing crypto assets, including NFTs, which are usually pieces of digital content (often photos and videos) where buyer ownership is recorded in a digital ledger (known as a blockchain), hoping to sell for a profit later.

Back in 2018, when he was on loan at Bayern Munich from Real Madrid before later moving to Everton, Colombian star James Rodriguez announced that he would launch his cryptocurrency, JR10. A streaming press release said the first batch of tokens sold out in 12 seconds, raising $500,000, and subsequent reports said the additional sales raised $5 million.

There is now no trace of the product. The company behind it, SelfSell, has gone bankrupt, and the domain that hosted their trading platform, SelfDax.com, is up for sale. Former SelfSell CEO Li Yuan did not respond to comment.

James Rodriguez is now promoting the sale of NTFs via another crypto asset company, Zilliqa. Asked about the JR10 episode, a Zilliqa spokesperson said, “Zilliqa does not represent James Rodriguez and is therefore not in a position to comment on your inquiries.”

In 2018, James Rodriguez announced that he would launch his cryptocurrency, JR10 token

In 2018, James Rodriguez announced that he would launch his cryptocurrency, JR10 token

A Zilliqa spokesperson provided contact details for a different representative from Rodriguez but they did not respond.

Rodriguez is one of 10 footballers, along with Manchester City’s Ruben Dias, Liverpool’s Raul Jimenez and Liverpool’s Diogo Jota, who has marketed Zilliqa’s NFTs to tens of millions of fans. Each NFT package appears to include what looks like some digital Top Trumps cards and some video clips; They are on sale for $3,500 each.

Zilliqa’s Refund Policy page states: “There will be no refund or sales cancellation of any completed purchase, sale or trade.”

Former Brazil player Ronaldinho has released a now worthless digital currency, produced by a seemingly dormant company. Earlier this year, his compatriot Anderson, a former Manchester United player, was charged with his involvement in an alleged crypto-criminal organisation.

Dreyfus admits: “We realize that there are bad actors in this space. Companies that have created unofficial fan tokens or tokens tied to individual characters with no real utility, platform, or teams to offer anything tangible.

Manchester City's Robin Dias is one of 10 footballers to market NFT from Zilliqa to their fans

Manchester City’s Robin Dias is one of 10 footballers to market NFT from Zilliqa to their fans

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