The euphoria of fan tokens started in 2020/2021, and it possibly will remain on the agenda for a long time.
The trend of fan tokens is not passionate fan thing only. Behind a fan, there may also be a consumer and an investor. This new type of digital assets brought a number of legal risks not yet dimensioned.
The risks vary depending on the type of token fan issued and traded. In the case of fan tokens of member-supporters, which give their purchasers access rights to products or services immediately or at a future date, problems of lack of information may occur. Questions like: what is that fan token for? What benefit does it give the purchaser? What happens if the purchaser is not satisfied with the benefit made available at a future date?
All these issues should be addressed in detail in the terms of use of the platform that publicly offers fan tokens. Many of such initiatives, however, are not sufficiently clear in their terms, which can lead to serious problems in the future.
Even if one informs the public about details of the fan token, risks still exist. The terms of use of the platform that trades fan tokens can be considered adareagreements, not subjecting the the purchaser to many of the clauses expressed there before Brazilian courts. An example is the foreign forum election clause for resolving any conflicts between the token purchaser and its issuer or offeror. This risk can be enhanced if the dispute involves consumer rights.
In addition to the risks associated with the member-supporter tokens, there is a more general risk that may affect the entire category of fan tokens, including so-called solidary tokens. This is the risk of the fan token being associated with a collective investment contract. In this case, the fan token will possibly be subject to Law 6,385/76, which establishes the need for registration with the Brazilian Securities and Exchange Commission (CVM).
A fan token offering may be considered a collective investment contract if it generates, when publicly offered, the right of participation on profits or remuneration, including as a result of the rendering of services, and whose profits derive from the efforts of the entrepreneur or third parties.
Despite this broad definition, the CVM, when analyzing the specific case of Vasco Token – solidary token that represents credit rights in future transactions of some players of the team – has understood that this fan token consisted of a collective investment contract. CVM considered that the participation rights resulting from the commercialization of Vasco Token were so uncertain that it would not be possible to say that the tokens would represent by themselves the right to participate, partnership or remuneration with income coming from the effort of the team or third parties.
Nevertheless, the risk of similar fan tokens fall within the definition of a collective investment contract is considerable. In order to mitigate this risk, every single detail of the fan token offering must be rigorously thought out. Otherwise, the legal problems may be proportional to the passion for the team.
