UK’s advertising regulator clamps down on crypto ads under “red-alert priority”
UK’s Advertising Standards Authority (ASA) recently noted that it aims to bring new guidance on cryptocurrency advertising. Meanwhile, BBC reported that the watchdog took down seven ads as “monitoring cryptoassets, like Bitcoin, is a ‘red-alert priority’…many ads fail to fully convey the risks of investing.”
With the new notification, ASA said that the ads were “banned for irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.”
Some of the banned promotions include a Facebook ad by Coinbase Europe, a paid-for display ad by trading platform eToro, and Papa John’s “free Bitcoin” promotion for BTC Pizza Day.
The report also noted that the pizza outlet argued that it refrained from making any comments on crypto investments in its promotion. However, the watchdog found that the offer “trivialized what was a serious and potentially costly financial decision, especially in the context of the intended audience who were likely to have limited knowledge of cryptocurrency”.
In July 2021, the Advertising Standards Authority in the U.K. had taken note of deceptive crypto ads, warning investors of risks associated with the asset class. Calling these ads “misleading,” ASA had also reportedly started an investigation when FLOKI ads ran on Transport for London (TfL) in October.
Apart from criticizing ad campaigns on public transports and bridges, ASA had also moved on to scrutinize influencers promoting tokens in the sector.
Siân Berry, the Green party London Assembly member had told local media,
“I don’t think cryptocurrency ads should be on the network. They’re unethical.”
A series of warnings also came from the Bank of England regarding crypto advertising after Kim Kardashian used her Instagram handle to promote a crypto token. Charles Randell, chair of the UK Financial Conduct Authority said in a speech that the post “may have been the financial promotion with the single biggest audience reach in history.”
Bank of England Deputy Governor Sir Jon Cunliffe has also warned that crypto regulations are a ‘matter of urgency. Recently telling BBC that,
“Their price can vary quite considerably and [bitcoins] could theoretically or practically drop to zero.”
Under the above-mentioned “red alert,” the regulator is expected to bring more comprehensive guidance on crypto next year, which can reportedly include rules on NFTs and fan tokens. Miles Lockwood, the watchdog’s director of complaints and investigations, told BBC,
“Cryptoassets are a red-alert priority issue for us. Consumers need to know about the risks of investing in cryptoassets and companies should make sure that their ads aren’t misleading or socially irresponsible by taking advantage of consumers’ lack of awareness around these complex and volatile products.”