The Advertising Standards Authority (ASA) has upheld four complaints against FanCraze Technologies Inc and Essex County Cricket Club (ECCC) regarding a message on X/Twitter promoting non-fungible tokens (NFTs) relating to cricketers (A23-1199796 FanCraze Technologies Inc).
In October 2023, the Financial Conduct Authority took over the regulation of adverts for “qualifying cryptoassets” in the UK. However, the new rules do not cover cryptoassets that are non-fungible, such as NFTs.
The case before the ASA concerned a tweet from ECCC on 30 May 2023 that stated: “Unveiling a new way of fandom with @OxFanCraze! Supporters can now collect, trade and play cricket strategy games with licensed player cards of their favourites to win cash rewards & never seen before fan experiences!” The post also included a link and an image.
ASA findings
The ASA found:
The post was not obviously identifiable as a marketing communication as it did not contain a label or identifier
The ad was misleading because it did not make consumers aware that a FanCraze cryptowallet was required to purchase the NFTs or that they existed on a blockchain.
It did not include any risk warning making consumers aware that they were liable to pay a ‘gas fee’ and that it was referring to an investment product.
It did not make consumers aware that NFTs were an unregulated cryptoasset whose value could go down as well as up or that they existed on a proprietary platform and could not be sold or traded outside of it.
The ASA said the ad must not appear again in its current form and its findings should be taken into account in future advertising. In particular, any future ads should be obviously identifiable as marketing communications and FanCraze must ensure their advertising makes clear the risks of NFTs and include all material information.
What does this mean?
Any company, organization (or, as here, sports club) that is promoting new products or services, such as NFTs, needs to ensure that they (and where appropriate their business partners) understand and follow the rules on advertising that apply.
In particular, social media posts that constitute marketing should be clearly labelled as such and in the case of financial products the risks must be set out.
Get in touch to find out more about the rules that apply to advertising, including on social media.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com