Manchester City’s new crypto sponsor offering banned product to UK consumers

Manchester City’s new “official cryptocurrency exchange partner” appears to be offering a product to UK consumers which is banned by the UK Financial Conduct Authority because of likely “harm from sudden and unexpected losses”, The Athletic can reveal.

The product was mentioned in the publicity surrounding the City deal.

An OKX spokesperson said the company remains in compliance with the rules outlined by the Financial Conduct Authority and does not sell crypto derivatives to UK consumers.

On March 4, City announced the deal with OKX, a “fast, secure and innovative cryptocurrency exchange” based in the Seychelles. Cryptocurrencies like Bitcoin and Ethereum have boomed in popularity over the last year, after rising in value making them appealing as a high-risk asset, although they have slumped in value in recent months. Football clubs are now trying to join the gold rush.

OKX sells cryptocurrencies, which is perfectly legal in the UK. But in OKX’s announcement of the deal, beneath a photo of City stars Raheem Sterling, Kevin De Bruyne and Jack Grealish, the company boasts of having “the planet’s most active crypto derivatives markets”.

Since January 2021, selling crypto derivatives to UK retail consumers has been banned by the Financial Conduct Authority who, after a lengthy consultation, concluded that “retail consumers might suffer harm from sudden and unexpected losses if they invest in these products”, going on to outline concerns over crime and fraud in the secondary market.

Despite this, a look at the site and its publicity makes clear that crypto derivatives trading is a core part of the company’s business, and appeared to be available when logging in from a UK computer, and derivatives were mentioned in marketing emails with no disclaimers.

An OKX spokesperson provided evidence that disclaimer messages appear for UK customers on desktop and mobile when selecting the account mode, and when attempting to upgrade an account to trade leveraged products. However, unlike other cryptocurrency exchanges, these do not appear at any earlier stage. The UK is also not mentioned as a “restricted territory” in the OKX terms of service.

OKX removed the mention of crypto derivatives from the City announcement after The Athletic asked questions.

“This text was featured in an ‘About OKX’ section on a partnership-related landing page located on okx.com,” a spokesperson said. “Furthermore, it described OKX global operations. We have removed the text that mentions ‘derivatives’ from said text in order to avoid further confusion.”

The company argues the City partnership is for a global audience, not necessarily just people in the UK, like the City fans who will see the company’s logo beamed around the Etihad Stadium.

(Photo: Mike Egerton/PA Images via Getty Images)