UK Watchdog Clamps Down on Crypto Firms for ‘Misleading’ Advertisements
More than 50 cryptocurrency companies have been put on notice for “misleading” and “irresponsible” advertisements
Crypto roadside advertisement | Source: Shutterstock
key takeaways
- The UK Advertising Standards Authority previously scrutinized ads from Coinbase
- Agencies in Spain and Singapore have also warned firms for promotions
A UK regulator sent over 50 crypto companies enforcement notices to review their advertisements – joining a growing list of countries cracking down on promotions in the nascent space.
On Tuesday, the UK Advertising Standards Authority (ASA) threatened firms with targeted sanctions if “problem ads” continue after May 2.
“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible,” the watchdog said in a statement.
The ASA said companies should not call investing in cryptocurrencies “trivial” or “suitable for anyone.” Additionally, they can’t create a “fear of missing out” on investments in the digital asset class.
The advertising watchdog did not publicly name the companies it had contacted. ASA, however, said they had previously banned Coinbase and Papa John’s ads.
An estimated 2.3 million UK consumers are holding crypto, according to a June FCA report.
Susannah Streeter, a senior investment analyst at British financial services company Hargreaves Lansdown, told Blockworks the ASA could only censure firms after the ads are out.
“The rollercoaster ride is set to continue, given that crypto assets are also highly sensitive to the fortunes of the stock market and were propelled higher in an era of ultra-cheap money,” Streeter said in an email. “As speculation swirls about how rapidly central banks will tighten mass bond buying programmes and start raising interest rates, given soaring inflation, they are likely to stay volatile.”
Last year, the ASA investigated Arsenal Football Club for promoting crypto tokens to fans because it “failed to illustrate the risk of the investment.”
ASA’s enforcement notices follow rules outlined by Spain’s national securities market commission on Jan. 17. The agency’s new circular aims to ensure “advertising of the products offers true, understandable and non-misleading content and includes a prominent warning of the associated risks” of crypto.
The Monetary Authority of Singapore, meanwhile, on Jan. 18 urged digital payment tokens providers to not play down crypto risks. Regulated providers, including banks and financial institutions, are now barred from promoting their services except via their own social media, websites or mobile apps.
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