CVM clarifies its position on “phantom tokens” of football clubs

The Securities and Exchange Commission (CVM) recently issued a video explaining the growing trend of “fan tokens” issued by football clubs worldwide. This type of cryptocurrency has gained prominence because it is a form of engagement between clubs and their fans.

“Fantokens”, as clarified by the CVM, in general do not fall into the security category. They are essentially tools focused on fan engagement and marketing strategies.

They can offer their holders various benefits such as exclusive interactions, priorities in the purchase of products and services and other benefits not directly related to the economic result of the club’s activity.

Fan tokens

Given their specific nature, “phantom tokens” are classified as utility tokens by the CVM. This means that they do not fit into the traditional concept of effects that she posits outside the regulatory scope of the CVM.

“In the absence of a link with the distribution of results and participation in a particular company, fan tokens are considered utility tokens and therefore do not fall under the concept of securities and fall outside the regulatory perimeter of the CVM. Consequently, it is not possible to conduct a public offering through a mechanism regulated by the CVM, unless the same token also has characteristics that classify it as a security.– says the municipality.

Finally, the video emphasizes that the public offering of these tokens is not permitted through any mechanism regulated by the CVM unless the token exhibits characteristics that classify it as a security.

The measure aims to clarify possible market doubts and ensure that both issuers and investors have clarity about the nature and regulation of these instruments.

“Fan tokens”, it is worth remembering, are digital tokens based on blockchain technology. They represent a form of digital currency that offers their holders certain privileges or interactions with sports teams, artists or entertainment entities.

The difference between “phantom tokens” in relation to traditional cryptocurrencies, such as Bitcoin or Ethereum, is their specific purpose. While most cryptocurrencies are designed primarily as a form of value or a medium of exchange, “phantom tokens” are created to engage fans and bring them closer to the entities or personalities they represent.

For example, a football club issuing its own ‘phantom token’ could offer token holders the opportunity to vote on specific aspects of the club, such as choosing the design of a new kit.

Additionally, holders may have access to exclusive rewards, merchandise discounts, or unique experiences not available to the general public.

It is important to note that while “fan tokens” may have an associated value and can be traded on specific platforms, their main purpose is to foster a deeper connection between fans and their idols or clubs, allowing for a level of interaction and engagement made that previously unattainable..

Source: Live Coins