This is a collection of links to material to help fans better understand Socios and its implications for football.
Socios in brief
- Socios is a cryptocurrency business that partners with sports teams to issue ‘fan tokens’ through its app
- Fan tokens are tradeable digital assets (not shares in the clubs) which give access to rewards and the right to vote in club polls
- Socios has signed deals with six Premier League clubs as well as Barca, PSG, Inter and AC Milan, Roma and dozens more
- Socios issues tens of millions of fan tokens per club, as well as gifting one free, non-tradeable token to the club’s season ticket holders and registered supporters
- Socios sells a portion of the tokens – usually between 500k and 2m – splitting the proceeds 50/50 with clubs
- To buy the tokens, you have to use Socios’s own cryptocurrency – Chiliz
- It is not uncommon for more than $1bn of fan tokens to be traded each day
Problems with Socios
- Socios charges fans for influence in their own clubs
- The votes are often on very minor matters
- Anyone can buy any number of fan tokens in any number of clubs – meaning people can pay to vote on the business of clubs they don’t support
- It’s not One Member One Vote – while votes tend to be capped at 200 votes per person, the more you pay, the more power you have
- Token prices aren’t fixed – they float with supply and demand, creating a market for tokens that exposes fan users to professional traders
- Forcing users to transact in Chiliz means that their holdings vary not just according to demand for the tokens but also demand for the crypto – which is volatile and impacted by non-football factors
- There is evidence of traders scamming fans by running pump-and-dump schemes with the tokens
- Fan tokens and Chiliz aren’t regulated in the UK – with the FCA describing them as a very high risk speculative investment, where buyers should be prepared to lose their entire investment and, if they do, to have no recourse to anybody
- Socios owns the app, the vast majority of the tokens and currency units, the marketplace, the commercial relationships and it schedules and prices the sales – creating a huge conflict of interest
- Socios and many of its clubs market the product irresponsibly – downplaying or completely ignoring the risk and, on occasions, pretending the product isn’t designed to encourage speculation
- Socios market the tokens as having permanence, but their partner contracts are time-limited. When the contracts expire, the tokens have no utility and will likely become worthless
- In summary: football clubs are allowing their brands and fans to provide a respectable public face for a cryptocurrency recruitment scheme, potentially harming fans – and the prospect of genuine fan engagement efforts
Socios resources
The best democracy money can buy – a piece I wrote when Socios launched explaining the concept
A podcast about Socios – I was interviewed by a Leeds United pod shortly after they signed with Socios and given 30 minutes to unpack the business in detail and explain my concerns
Socios ‘fan tokens’ – what they really are and how they work (£) – a special investigation by Joey D’Urso for The Athletic in August 2021 looking at concerning patterns in the use of Socios by traders and how it may harm fans
Football’s crypto king and the missing millions – an investigation into Socios’s business practices by James Corbett for OffThePitch.com which found that, “Socios founder Alexandre Dreyfus withheld crypto payments to staff and advisors, potentially worth tens of millions, to maintain the value of chiliZ, the cryptocurrency he also controls.”
What the FCA says about cryptoassets – so you can understand how much of a Wild West crypto is
Arsenal adverts for cryptocurrency ‘fan tokens’ banned – report on the Advertising Standards Agency’s ruling that Arsenal (and, by extension, all Premier League partner clubs) advertised Socios fan tokens irresponsibly and misleadingly
Socios.com model is not helping football nor fans – an interview with Currency.com where I was given an opportunity to explain why the damage to supporter relations for clubs is unlikely to be off-set by significant new revenue from Socios
What is Socios? – a good, brief video explainer from The Athletic
Caveat emptor, $EFC fan token offering (C) – Everton podcaster The Esk unpacks all the concerning elements of the app and trading platform that the Socios marketing doesn’t tell you
How traders use Socios to scalp fans – a twitter thread charting price movements on Atletico tokens when they clinched their last title. The same pattern was later seen when Messi moved to PSG
How Socios misuses the language of the stock market to create the false impression of value and urgency. AKA how they hype worthless tokens like they are real stocks
‘Alarm bells’ ringing over new football sponsorship pricing fans out of the game – a report from Joe.co.uk on growing fan opposition to Socios
Fans turn against crypto’s takeover of football – a piece from the FT’s Sifted on growing concerns about Socios.
‘Aston Villa Supporters’ Trust condemn “wholly inappropriate” Socios agreement‘ – a piece from Joe.co.uk on dissatisfaction among Villa fans about Socios
Socios embroiled in legal battle with Argentine FA – Socios were fired by the Argentine FA in January 2022, supposedly for poor performance, raising questions about what happens to tokens when contracts with clubs or other partners end
How football jumped on the crypto hype (£) – an Economist explainer looking at the extent to which “fan token” prices are overwhelmingly determined by cryptocurrency, not football results
MiniFootball (£) – another piece by Joey for The Athletic on a new crypto scheme in football (not connected to Socios) and how it duped players into endorsing it
After gambling, crypto? (£) – a piece from The Athletic on how a ban on shirt sponsorship by betting firm (while welcome) could lead to cryptocurrency firms filling the void
If you have any material for inclusion on this page, please contact me on twitter.com/uglygame
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