The Culture Media Sport Committee has criticised sports clubs utilising digital tokens to boost fan engagement, warning the volatility of the coins.
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 underlined that clubs shouldn’t be able to promote and sell crypto tokens to fans, given how much supporters could lose as a result of embracing and engaging with digital assets – this is something that is elevated by the fierce loyalty to the club from supporters.
“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,” stated the committee.
“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.”
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.
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.”
The warnings are as English football awaits a change in regulation, with the UK Government recently releasing 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.