Enforcement notices dispatched. The UK’s Advertising Standards Authority puts 50 crypto firms on notice over ‘misleading ads’
The UK’s advertising watchdog, the Advertising Standards Authority (ASA), has warned of targetted sanctions, if crypto firms continue to publish ‘misleading ads’.
On Tuesday, the ASA said it has “issued an Enforcement Notice to over 50 companies which advertise cryptocurrencies, instructing them to review their ads and to ensure they understand and are complying with the rules so that consumers are treated fairly.”
It comes after the UK’s financial watchdog, the Financial Conduct Authority (FCA), in January said it would clamp down on the marketing proliferation of crypto and other high-risk investments.
It comes after streaming services such as YouTube have become increasingly populated with adverts that tout “taking a punt” on crypto assets or other investment schemes.
Matters have not been helped by the fact that sometimes these adverts have been endorsed by celebrities or sport stars.
Reality TV star Kim Kardashian and boxer Floyd Mayweather Jr. for example are currently facing a lawsuit in the United States, alleging the celebrities misled investors in their promotion of a cryptocurrency token.
Meanwhile the Spanish market regulator censored football player Andres Iniesta in November last year after he promoted cryptocurrency exchange platform Binance on his Twitter and Instagram accounts.
Spain has also sought to regulate crypto advertising, including by social media influencers.
Hollywood actor Matt Damon meanwhile has fronted a campaign to promote digital asset platform Crypto.com.
And last November the estate of the author of the fantasy epic ‘The Lord of the Rings’ moved to block a cheeky move by a cryptocurrency developer, which tagged itself with the tagline “The One Token That Rules Them All”.
The estate of JRR Tolkien fiercely protects his name and took trademark action against the developer of a cryptocurrency called JRR Token.
The JRR Token cryptocurrency was launched last August, and included a video endorsement from Billy Boyd, the actor who played Pippin in The Lord of the Rings films.
All of this led the Bank of England in December to issue a fresh warning about the risks associated with cryptocurrencies.
Into all of this comes the news that the UK’s ASA has issued an enforcement notices to 50 crypto firms.
The Enforcement Notice provides guidance to the crypto industry on how to stick to the rules and warns the UK advertising watchdog will monitor for compliance and implement sanctions if it does not see improvements.
The guidance requires that advertisers:
- should clearly state that cryptocurrencies are unregulated in the UK and that the value of investments are variable and can go down
- must not state or imply that investment decisions are trivial, simple, easy or suitable for anyone
- must not imply a sense of urgency to buy or create a fear of missing out, or that investments are ‘low risk’
The ASA said this is a ‘red alert’ priority issue for it and the watchdog has recently banned several crypto ads for misleading consumers and for being socially irresponsible.
“The notice continues our work in clamping down on problem crypto ads,” the watchdog said. “As part of this, we are working closely alongside the Financial Conduct Authority (FCA) to take action against those who appear unable or unwilling to abide by the rules.”
The ASA said the enforcement notice applies to ads for cryptocurrencies, crypto exchanges and ads or promotions which otherwise involve the transfer, sale or supply of cryptocurrencies, targeted at UK consumers or that are targeted globally on behalf of UK-based advertisers.
Sanctions to follow
The ASA’s Compliance team will conduct follow-up monitoring and if problem ads persist after May 2, it “will take targeted enforcement action to ensure a level playing field. This will include non-compliant advertisers being reported to the FCA, who have worked closely alongside us in helping to distribute the Enforcement Notice. ”
“Crypto has exploded in popularity in recent years,” said ASA’s chief executive Guy Parker. “We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks.”
“Working alongside the FCA, we’ll take strong action against any advertiser who fails to ensure that their ads are responsible,” Parker warned.
This sentiment was echoed by the FCA.
“We will continue to work closely with the ASA to tackle unclear or misleading crypto advertising,” said Sarah Pritchard, FCA’s executive director of markets.
“People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website,” said Pritchard. “Crypto assets remain unregulated and those who invest in them should be prepared to lose all their money.”