Leading European soccer teams have reportedly made millions from the sale of crypto tokens to their supporters around the world. The scheme aimed at increasing fan engagement has been praised as an alternative revenue source during the pandemic but also criticized as a “gateway into speculative cryptocurrency.”
40 Soccer Teams in Fan Token Scheme Criticized by Supporters Groups
Europe’s top soccer clubs have made £150 million (over $204 million) from sales on the Socios.com platform where they can offer special fan tokens, the Telegraph reported. Arsenal, Barcelona, Juventus, and PSG are among over 40 of the Old Continent’s biggest football teams that are already working with the “fan influence and rewards” scheme.
Since 2019, close to a million users have signed up for Socios which is mostly targeting young, online-oriented fans. They can buy the tokens launched by their favorite clubs and receive voting rights on certain club decisions such as which songs to be added to the stadium play-lists. Acquiring more credit entitles them to unique opportunities like playing on the team’s pitch.
The scheme has been criticized by supporters groups that have pointed out that fans are taking risks with their involvement in “unregulated currency markets.” The U.K.’s Football Supporters’ Association claims it has received complaints from multiple Premier League fan groups. Adam Willerton, secretary of Leeds United Supporters’ Trust stated:
Our worry is for vulnerable or less technologically adept people coming into this ecosystem of cryptocurrency.
Lionel Messi’s recent move to PSG, for example, caused sharp fluctuations in the value of the club’s token, prompting the Clean Up Gambling group to describe the system as a “gateway into speculative cryptocurrency.” The price of the $PSG token spiked in the days before the football star’s transfer was confirmed but has since fallen again.
Four Clubs Pocket £20 Million Each, Socios Founder Defends Revenue Source
Other concerns stem from the way such tokens are being marketed. The newspaper quotes Martin Calladine, author of The Ugly Game, who described the advertising methods as “completely misleading.” He referred to a pre-sale advertising by Socios at Arsenal allegedly suggesting that acquiring the tokens is “like buying foreign currency for a holiday.” Britain’s Advertising Standards Authority has invited worried fans to reach out.
However, Socios founder Alexandre Dreyfus has rejected claims that fans could lose large amounts of money because of the tokens’ fluctuating values and dismissed skepticism regarding the scheme. He stressed that “blockchain is transparent – that’s the beauty of it, everything is public.” Dreyfus also revealed that four of the participating clubs have already made almost £20 million ($27 million) each in the past 12 months and emphasized:
That’s a significant revenue during Covid-19.
To mint the branded fan tokens, Socios relies on the Chiliz blockchain fueled by its $CHZ currency. The French entrepreneur says he has simply found “a new way to generate revenue” from a fan base that is different from the traditional matchday ticket-holder. The U.K. market currently accounts for only 1.5% of Socios’s total revenue and customers, the report detailed. The platform has gained much more popularity in South-East Asia, Brazil and Turkey.