UK Advertising Watchdog Tightens Clampdown on Misleading Crypto Ads
Key Insights:
- ASA has issued an enforcement notice to clamp down on ‘misleading’ crypto ads.
- Over 50 companies, including Coinbase, Crypto.com, Floki, have received the notice asking to review their ads.
- The ASA will conduct follow-up monitoring on May 2, and non-compliance would lead to extreme action.
Over 50 companies that have advertised crypto services in the UK face strict enforcement from the British Advertising regulator.
ASA Continues Crypto Ad Banning Spree
On Tuesday, the UK’s Advertising Standards Authority (ASA) issued an enforcement notice ahead of an imminent crackdown on “misleading and irresponsible crypto ads.”
The list of 50 companies that fall under ASA guideline include companies that have previously faced ASA rulings, the regulator told CoinDesk. These include Coinbase (COIN), eToro’s UK arm, Luno, Crypto.com, and Floki, which ran “irresponsible” ads in the eyes of ASA.
The notice applies to advertisements related to cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and crypto exchanges that promote transfer, sale trade, and supply of cryptos.
Per the ASA announcement, this is a ‘red alert’ priority, and the set companies must review their ads and stick to the rules laid out by the regulator. The watchdog said that it will monitor for compliance and would implement sanctions if it sees no improvements from the companies.
The UK has been clamping down several crypto ads as a part of its ad-banning spree. The regulator claim that the ads failed to highlight crypto investments risk and take advantage of consumers’ inexperience.
Early this year, the UK’s HM Treasury put forth rules on crypto-related promotions to align with other financial advertisements such as shares, mutual funds, and stocks.
Both the UK government and the ad regulator ensure consumers are protected and aware of its volatility, as cryptos are not regulated in Britain.
What Advertisers Need To Comply With
The ASA has stipulated specific guidelines for those companies that received the notice. These guidelines state,
- Advertisers must clearly state that cryptos are subject to volatility and are unregulated in the country.
- Companies should not promote crypto investments as ‘easy, trivial, or suitable for all.’
- Crypto promotions must not induce a sense of urgency in consumers’ minds by creating a fear of missing out on the investment opportunity.
According to Guy Parker, Chief Executive of ASA, cryptos have ‘exploded in popularity’ in the past years. Due to the reason, he said,
“We’re concerned that people might be enticed by ads into investing money they can’t afford to lose without understanding the risks.”
The advertising authority is working along with the UK’s Financial Conduct Authority (FCA) in ensuring all advertisers comply with the guidelines. Parker noted that they would be subject to strict actions if they failed to abide.
On the other hand, FCA has also been moving in leaps and bounds in banning a slew of crypto-related activities, including selling all cryptocurrency derivatives (including exchange-traded notes) and, recently, crypto ATMs.
FCA also booted the world’s biggest cryptocurrency exchange Binance, pointing out that the company doesn’t have the authorization to operate in the country.
“People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website. Crypto assets remain unregulated, and those who invest in them should be prepared to lose all their money.”
The Tuesday release said that companies advertising crypto services have a deadline until May 2 to ensure that their promotions meet the new guidelines.
