A report by the Culture Media Sport Committee has taken aim at sports clubs utilising digital tokens to boost fan engagement, warning over the volatility of the coins.
The government body has emphasised that clubs shouldn’t be able to sell them to fans, as they are little more than an opportunity to gain money from supporters, with unwavering loyalty to the club.
The committee report detailed that there is an increased risk of supporters being exploited as the relationship between clubs and fans is so ‘unique’.
It also added that this could lead to additional threat to the reputation of clubs and their staunch loyalty from fans, who suffer at the hands of volatility of digital assets.
“We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups.
“We recommend that any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens.”
In terms of specific firms, Socios was one that the government report highlighted as being a key player for sports clubs that have taken advantage of this practice.
Committee chair Dame Caroline Dinenage MP also commented: “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 fail to materialise.
“Fan token schemes must not be used as a substitute for meaningful engagement with supporters.”
It comes as English football waits for a change in regulation, with a new body set to take ownership of the framework that governs the sport.
The UK Government recently released its latest response relating to the establishment of a new football regulator to protect clubs’ and fans’ interests.
In the public letter, the state expressed that after a lengthy consultation with clubs and football authorities, all proposals put on the table for how the new football regulator should operate remain under review.