Former England striker and Ballon d'Or winner, Michael Owen, has recently received strong criticism from the crypto community for promoting his new NFT venture and claiming that it will not lose value.
Owens is currently the latest football star to join the NFT mania, with the launch of his Legacy NFT collection in collaboration with Oceidon, a blockchain technology provider.
According to a recent report by The Telegraph, Owen claimed that the NFT collection has been designed in a way that will only allow its floor price to increase but never go down. Explaining the mechanism behind this baffling claim, Andrew Green, the co-founder of Oceidon, stated that the NFTs can only be traded when demand for it is high.
Once the demand for the NFTs goes down, they are artificially locked in at a high price and can not be sold for less, even if there are willing buyers. Thus, investors could potentially lose their funds forever if demand for the NFTs does not come back up as they can only be sold for higher than the locked price.
The Crypto Community Reacts Strongly to Owen's Claims
Owen's claims of creating the "first-ever [NFTs] that can't lose their value" was not well received by members of the crypto community. Some questioned the credibility of the project with others making reference to Owen's football career. "Given that there is no footballer in the history of the game that lost his initial value more than Michael did, I don't believe him."
James Daley, managing director at Fairer Finance, also commented on the issue. He stated that it was quite "shocking" for him to see Owen using his fame to promote what was in reality a high-risk investment.
Daley said, "Celebrity advertising in financial services rarely goes well. Michael Owen is encouraging people to invest their hard-earned cash in risky assets. It’s all very well for him as he has already made his fortune in football. But for most people, that’s not the case." He further pointed out that Owen's NFT promotion could have breached the ASA's guidelines on crypto advertising.
Seeing the massive backlash the project was receiving, Andrew Green appeared to backtrack on the initial claims. He said, "Correct, we cannot guarantee or say that you cannot lose. There is always a chance. There is no such thing in life as no risk propositions. But what we can do is protect the collector as best we can and that's what the floor price protection will do."
UK ASA Reiterates Strict Rules on Crypto Advertising
Weighing in on the matter, the UK's Advertising Standards Authority (ASA) noted that it will not make an official comment on the claims to avoid creating a bias in any investigation. The regulator pointed out that crypto assets are still unregulated in the UK, hence its strict rules about their promotion.
"Celebrities and influencers are subject to these rules and need to make sure they’re not making misleading or irresponsible claims," the ASA concluded. The regulator has on several occasions flagged down crypto promotions that it described as "irresponsible".
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