Jack Kubinec

Nearly two years after Matt Damon declared that “fortune favors the brave” during Super Bowl LVI, commercials are once again fashionable in crypto.



After FTX’s demise <a href="https://blockworks.co/news/celebrities-erase-ftx-ties">led to a PR nightmare</a> for the celebrities and <a href="https://blockworks.co/news/crypto-sports-sponsorships-kaseya-center">venues</a> associated with its advertising, crypto commercials took on a decidedly more muted tone for a long while. But that seems to be changing, now that Bitwise, Hashdex, and VanEck are all jockeying for better positioning in the bitcoin ETF “<a href="https://x.com/EricBalchunas/status/1740008874042671231?s=20">Cointucky Derby</a>.” Each have released mobile-focused ad videos in the past two weeks.&nbsp;



Bitwise employed a spin on beer brand Dos Equis’ well-known “The Most Interesting Man in the World” ad campaign in its commercial, bringing in actor Jonathan Goldsmith to say, “You know what’s interesting these days? Bitcoin.”



VanEck’s spot, apparently a teaser for a longer ad, took a different approach. The nineteen second <a href="https://x.com/vaneck_us/status/1740734416949776605?s=20">clip</a> employs a series of bitcoin-related visual references, likely to appeal to a more niche audience than the Dos Equis homage.&nbsp;



Read more: <a href="https://blockworks.co/news/vaneck-easter-egg-bitcoin-teaser">Here&#8217;s all of the Easter eggs in VanEck&#8217;s bitcoin teaser</a>



Outside of ETF land, Coinbase drew <a href="https://x.com/JasonYanowitz/status/1730644110652879020?s=20">plaudits</a> from crypto-natives for an early December ad that played on discontent with the traditional financial system. But as potential approval for bitcoin spot ETFs seems imminent, the current energy around commercial-making appears locked in on ETFs.



And with the Super Bowl less than two months away, <a href="https://x.com/byKatherineRoss/status/1740780435343278094?s=20">perhaps</a> crypto will make its return to advertising’s biggest stage.&nbsp;



<h2 class="wp-block-heading">Solana Saga sellers dangle BONK airdrop</h2>



Dozens of Solana Saga mobile phones <a href="https://www.ebay.com/sch/i.html?_from=R40&amp;_nkw=solana+saga&amp;_sacat=0&amp;rt=nc&amp;LH_Sold=1&amp;LH_Complete=1">resold</a> for thousands of dollars apiece this week, most of which prominently displayed unclaimed airdrops of 30 million BONK.&nbsp;



These assets, worth around $450 at current <a href="https://blockworks.co/price/bonk">prices</a>, are one of <a href="https://x.com/blocknewsdotcom/status/1740060012993745237?s=20">several</a> airdrops driving continued hype around the phone, which <a href="https://blockworks.co/news/solana-phones-sold-out">sold out in the US</a> in mid-December. The resulting excitement has effectively amounted to a grassroots marketing strategy, with purchasers on X saying profit from the airdrops was enough to pay for the cost of the phone, <a href="https://blockworks.co/news/solana-saga-phone-price-cut">which retailed at $599</a>.



The phone’s value is debated. The Saga <a href="https://solanamobile.com/">comes</a> with Solana’s mobile software development stack. Solana founder Anatoly Yakovenko has <a href="https://twitter.com/aeyakovenko/status/1735640478186655930">said</a> the airdrops are part of an effort to “crack the App Store duopoly” and kickstart the development of “crypto incentivized apps.”



But popular tech YouTuber Marques Brownlee recently <a href="https://x.com/d_gilz/status/1737249515340763323?s=20">dubbed</a> the Saga the worst phone of the year.&nbsp;



“There is actually no price [at which] I would recommend anyone buys this phone,” Brownlee said.&nbsp;



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul>
<li>Bitcoin digital art sales volume is now more than <a href="https://www.cryptoslam.io/">double</a> what was seen on Ethereum over the past 30 days, according to data from CryptoSlam.&nbsp;</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul>
<li>The Avalanche Foundation <a href="https://twitter.com/avax/status/1740538202346381605">said</a> it would start purchasing Avalanche-based memecoins through its Culture Catalyst program.&nbsp;</li>



<li>Platforms allowing collectors to sell worthless NFTs for tax-loss harvesting are <a href="https://blockworks.co/news/nft-tax-loss-harvesting">seeing an end-of-year bump</a>.</li>
</ul>



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Web3 Watch: Crypto commercials are back

Katherine Ross

OKX’s chief marketing officer Haider Rafique wants OKX to be as trustworthy as Fidelity.&nbsp;



In an interview with Blockworks, Rafique explained how he’s approaching the company’s rebranding, advertising and the overall state of crypto.



In December 2021, OKX announced that it was planning to rebrand from OKEx to OKX. Rafique helped lead the rebranding, and acknowledged that the campaign has been tough.



“There’s still an appetite to push and bring utility,” he added.&nbsp;



The company is looking to build itself as a “generational brand” like Fidelity, a brand that Rafique himself trusts.



Read more: <a href="https://blockworks.co/news/okx-interview-hong-fang">Tech-first, trust-next: OKX’s roadmap for regaining consumer confidence</a>



“What&#8217;s important for us as a company is that we build the right market share; people who are going to stay with us if our aspirations are to be a generational brand,” he told Blockworks.&nbsp;



“I&#8217;m still a Fidelity customer from day one. I&#8217;m very happy with Fidelity because I trust them, their customer service is great, they&#8217;re reliable, I don&#8217;t have solvency concerns with them, so on and so forth.”



But building out a generational brand isn’t keeping Rafique or <a href="https://blockworks.co/tag/okx">OKX</a> from pursuing brand partnerships or celebrity deals.



Rafique said that other companies were “on the table” when OKX originally reached out to McLaren.&nbsp;



<iframe loading="lazy" src="https://player.vimeo.com/video/868590415?h=67d5369bfd&#038;title=0&#038;byline=0&#038;portrait=0" width="640" height="360" frameborder="0" allow="autoplay; fullscreen; picture-in-picture" allowfullscreen></iframe>







Another firm “had a much more sizable check than us. And the first conversation I had with McLaren was [that] I&#8217;m not going to be the largest check,” Rafique said.



But that didn’t dissuade OKX, and Rafique said that OKX will “absolutely” pursue more “celebrity-driven creative installations.”



Here’s more from Rafique’s interview with Blockworks:



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Blockworks: The last time we spoke [at Permissionless], we touched on how OKX is marketing or is changing its marketing strategy during a bear market…can you explain what kind of upside you see in the market we’re in currently?



Rafique: Well, I think marketing doesn’t just have to be ads. Marketing can also be our overall company posture as we show up in the market. When we think really hard about what the market needs, one thing that is very clear is that the world needs more trust with crypto and crypto firms. We have this debate in crypto on whether you trust a system — a centralized system — or you have trustless systems or permissionless systems. For us, we really lean in on helping customers see why they should trust us and point them to the systems that they should be looking at to develop or regain trust back in the crypto community. I think that’s going to be our continued focus, at least until regulations [in the US and globally] are a little more settled, like what’s happening in the UK. Following the [Sam Bankman-Fried] trial, the regulatory standpoint is hopefully going to look a little more established. I have always said, OKX aspires to be a generational brand. And to be a brand, it’s not about being in [a] bear or bull market.



Blockworks: Do you think you can re-earn or work back to earning trust from people who feel like they’ve been burned by companies such as FTX through being more creative, through showing them that OKX is transparent, but also here to ensure that the customers don’t feel that they’re pushing advertisements to you?



Rafique: I think so. However, it’s gonna take us a little bit of time to do it. I don’t think it will be easy to win the trust from those who got burned on Luna or FTX. I think it will take time, they’re very skeptical. But I am also not going to lie to myself. It’s gonna be really challenging to get those people to trust anyone in the industry anytime soon.



Blockworks: Do you think that the <a href="https://blockworks.co/news/okx-uk-marketing-fca-compliance">FCA’s new rules actually help OKX</a>?



Rafique: My point of view on rules and policies from regulators, or advertising bodies, is none of them have the perfect playbook for us. However, the most important thing is to first show them good behavior and show them support. What we’ve done is have continuous dialogue with them. Their requirement for disclaimers is a lot. That hurts when you’re putting that in [the] product, but we did it anyway despite our differences on point of view. We respect them, and over time as we gain their trust, and have more discussions together, we can shift policy to be a little more balanced so to speak.&nbsp;



Blockworks: Do you feel similarly about the EU’s markets in crypto-assets (MiCA)?&nbsp;



Rafique: My point of view on regulations globally, whether it’s [the] United States, MiCA, Hong Kong or Singapore, is that we take a collaborative and comprehensive approach. We want to gain regulators&#8217; trust, which starts with first complying. Secondly, it&#8217;s equally important to be transparent about our business. Once that fundamental trust is established, regulators see our sophisticated legal and compliance teams as well as the systems we’re putting in place and investing in. Then, we&#8217;re able to have a dialogue around what should be adjusted or considered to be adjusted. There are often two schools of thought: go to Twitter, and start sharing your frustrations with the rest of the world, [or] you can start to build and gain trust with regulators. I think we fall in the second group.



This interview has been edited for brevity and clarity.



Updated Oct. 26, 2023 at 2:39 pm ET: OKX announced the plan to rebrand in 2021.



Updated Oct. 24, 2023 at 5:35 pm ET: Interview edited for clarity.



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OKX wants to build a ‘generational brand’ like Fidelity, says CMO

Darren Kleine

Ever felt like Facebook or Instagram were somehow listening to you and sending ads for products that you just talked about…or even just thought about?



It’s not as magical or mysterious as one might imagine, Antonio Garcia-Martinez says. In a mundane reality, a user browses a given topic somewhere and a few minutes later, a relevant ad appears, thanks to the browser’s stored data.



“You shopped on the website and you came back to Instagram and that&#8217;s why you saw the ad inside Instagram,” he says, “because two seconds before, you were on that website and indeed, they uploaded your email to <a href="https://blockworks.co/tag/facebook">Facebook</a> and said, ‘show this ad to everyone who came, but didn’t buy,’ and that&#8217;s what you&#8217;re seeing.”



Another “super-valuable” way that ads target a specific audience is via “look-alike” mechanics, Garcia-Martinez explains, where a “similarity metric between users” can be used to hone in on new potential consumers.



User data that determines who is like each other, combined with a connection to “the outside world” enables targeted ads to be effective, he says. “That&#8217;s how all of this started working on Web2.”



On the Lightspeed podcast (<a href="https://open.spotify.com/episode/3FXTD7rjTjdht4XHlsCxhn">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/how-onchain-attribution-will-catalyze-cryptos-growth/id1697548240?i=1000631076961">Apple</a>), the Spindl CEO explains how he is now applying the same principles to <a href="https://blockworks.co/tag/web3">Web3</a>, where he says most marketers are “flying blind.”



Garcia-Martinez spent “10 plus years” in ad tech with companies like <a href="https://blockworks.co/tag/facebook">Facebook</a> and <a href="https://blockworks.co/tag/twitter">Twitter</a> before being “crypto-pilled.” Moving into Web3, he says he could not understand how companies with billion dollar valuations didn’t understand their “basic user value” or “where users were coming from.”



“They didn&#8217;t understand anything, basically,” he says, “and it was so odd to me because, again, so much of this data actually is on-chain now.”



The blockchain is “a miracle that is amazing in many ways,” says Garcia-Martinez, but as a marketing database, “it’s not particularly good.” Spindl exists for this reason, he says, using blockchains to present a “view of the world the marketer cares about.”



The average marketer doesn’t care about on-chain minutiae like blocks, transactions and smart contracts, Garcia-Martinez says. But information revealing that a user spent $6,000 on a microsite after discovering it via Twitter, for example, would be highly valuable. “That’s what they want.”



The <a href="https://blockworks.co/news/spindl-ad-attribution">“nerd name” for this process is “attribution,” Garcia-Martinez explains</a>. “Tying all that together is like, basics. Without that, you have no idea what&#8217;s going on as a business.”



<h2 class="wp-block-heading">Nerding out with new tools</h2>



Garcia-Martinez acknowledges that many Web3 marketers have been resourceful, using the limited tools available to them. <a href="https://blockworks.co/tag/nfts">NFT</a> drops, for example, behave like simple ads, he says. “It&#8217;s not a great ad, but it appears in your wallet and <a href="https://blockworks.co/news/lufthansa-polygon-nft-rewards">you sort of engage with it as soon as you see it</a>,” he says, adding that token drops can also act as referral reward programs.&nbsp;



“They&#8217;ve been using the tools they have,” he says, “but they&#8217;ve been very poorly measured.”



Garcia-Martinez says that Spindl aims to tell marketers the “whole user journey,” tying together all relevant user data. The other aspect of the product, he says, “is to really nerd out” with a payment model that doesn’t exist in Web2.



Illustrating Web3’s payment advantages over the Web2 marketing model, Garcia-Martinez describes a typical ad-client scenario. “I fire an event to Facebook saying, yeah, we converted him. Facebook says, ‘great, pay me 30 bucks.’”



Read more: <a href="https://blockworks.co/news/synthetix-web3-tools-kain-warwick-lightspeed-engagement">Here’s a crazy idea: What if we used Web3 tools to engage with Web3 products?</a>



“Hopefully, that user pays out and earns more than the $30 you pay Facebook. It&#8217;s less risky than just paying for ads and hoping to God the user comes in and buys, but it&#8217;s a little risky, right?”



“Wouldn&#8217;t it be cool if I could say, ‘Look, I only pay for the user if they come in, they spend money, and then by the way, I&#8217;m paying you a fraction of their revenue?’” he asks.&nbsp;



“Web3 is going to have a smarter, more interesting, more fair, <a href="https://blockworks.co/news/reward-consumer-feedback-web3">more transparent marketing stack</a> than <a href="https://blockworks.co/tag/web2">Web2</a> ever had,” he says. With native on-chain payments that transparently follow and reward any resultant revenue-generating activity, Garcia-Martinez explains that “everyone can take a little cut of it.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG5511960617" width="100%"></iframe>







“But the advertiser loves it,” he says, “because if the user didn&#8217;t come in, guess what? I pay nothing.” 



“I only pay if I get paid,” he says. “It&#8217;s way better than how things used to work.”



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Web3 marketers are ‘flying blind,’ says Spindl’s Garcia-Martinez

James Cirrone

Google recently tweaked its policies on cryptocurrencies and related products, expanding the range of permissible advertisements for games based on NFTs.



When the changes go into effect on Sept. 15, advertisers offering NFT games that don’t promote gambling will be able to safely advertise those products, provided that they are certified by Google.&nbsp;



To be certified, the NFT games cannot involve the staking or wagering of NFTs in exchange for a chance to win other NFTs, cryptocurrencies or anything else of real world value, according to the <a href="https://support.google.com/adspolicy/answer/13985443?hl=en&amp;ref_topic=29265&amp;sjid=12135309157028664938-NA">rule change</a>.



Ad-eligible NFT games also may not promote simulated casino gambling, nor can they promote “real money gambling destinations.”&nbsp;



Google cites blockchain-based NFT games, where players can buy in-game items like weapons or armor for their characters, as acceptable examples.



Read more: <a href="https://blockworks.co/news/youtube-new-ceo-gets-nfts">YouTube Has a New CEO Who Actually Gets NFTs</a>



Companies that want to advertise their NFT games will also need to comply with Google’s <a href="https://support.google.com/adspolicy/answer/13854232?hl=en&amp;ref_topic=29265">gambling policy</a>, which was also updated in late August.&nbsp;



The gambling policy now stipulates that advertisers may not target users under 21 and must include a warning about the dangers of gambling addiction.



Google clarified that breaches of its cryptocurrency and NFT advertising guidelines will not result in an “​​immediate account suspension.” Instead, users will first receive a warning before any action is taken against the offending account.



Google has been gradually warming up to Web3 since at least January 2022, when it created a division of the company dealing exclusively with “<a href="https://blockworks.co/news/google-cloud-web3-dive">blockchain and other next-gen distributed computing and data storage technologies</a>.”



More recently in April 2023, <a href="https://blockworks.co/news/google-cloud-web3-program">Google Cloud introduced a Web3 startup program</a>, which gives fledgling companies access to benefits like access to Alchemy University and grants from foundation partners.



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Google loosens ad guidelines for NFT game providers

“To be very mercenary and cold-blooded about it,” Antonio Garcia Martinez says, the ads marketplace is “literally, a marketplace in human attention.”



“I&#8217;m a publisher, right? I have attention and I want to turn it into money. I&#8217;m an advertiser, I have money and I want to turn it into human attention. That little yin yang is the dialectic that rules all in an ad system,” he says.



The author of bestseller Chaos Monkeys, Web2 ad-tech veteran and Spindl founder is tackling the problem of ad attribution in the nascent blockchain space. Described as “the first real way to do measurement and attribution in Web3” on his <a href="https://blog.spindl.xyz/p/why-spindle">blog</a>, Spindl figures out who is engaging with ads and ultimately delivering revenues to clients.



Speaking to Blockworks on the Empire podcast (<a href="https://open.spotify.com/episode/5s40oArIUWCJpNZdADlrTT">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/web3-ad-markets-explained-antonio-garc%C3%ADa-mart%C3%ADnez/id1554930038?i=1000626068191">Apple</a>), Martinez explains that the <a href="https://blockworks.co/tag/web3">Web3</a> formula for ad attribution has to be entirely different from the old Web2 approach. “I pay Facebook 30 bucks for the user,” he says. “I kind of own the user. The user comes in and uses my app and they spend 70 bucks and they churn out, and that&#8217;s the full lifetime.”



“I pay for the user, I own them. I kind of milk &#8217;em. They disappear.” But Web3 does not work that way, he says. Instead of “buying” users, he says, “you rent them.”



“Either you have to constantly pay them rewards — <a href="https://blockworks.co/tag/blur">Blur</a> comes to mind — for them to stick around or promise them rewards for them to stick around.” Unlike Web2, the monetization model in Web3 is ongoing, he explains, “like a coupon payment on a bond.”



Spindl crosses the Web2 chasm to Web3, but on the Web2 side of its infrastructure, Martinez says, it remains “pretty normy” in appearance, much like Google Analytics. “Where it gets a little weird,” he says, “is when you sign in with the wallet and you go on-chain and you start doing stuff and you&#8217;re kind of out of Web2.”



<h2 class="wp-block-heading">The smart way also happens to be the hard way</h2>



Before Spindl existed as a Web3 ad attribution service, people would “fire events into a conventional Web2 system,” mimicking what’s happening on-chain with double-entry bookkeeping.



“They had no alternative,” he says, “but it&#8217;s a very hacky way of doing it because you&#8217;re never going to keep up. You&#8217;re never going to keep up with what&#8217;s happening on-chain.”



The smart way to do it, Martinez says, also happens to be the hard way. “Indexing the sub graph correctly and measuring what&#8217;s happening on-chain correctly and backing that into the revenue number that you care about — that&#8217;s how we do it.”&nbsp;



Martinez explains that the service tracks “the Web2 stuff in a very Web2 way.” But the difference is, the company also tracks “the Web3 stuff in a fully Web3 way,” he says. “Then, we join that in a different way, but that&#8217;s how we do it.”



“We don&#8217;t fire events to ourselves,” he says, “but the advertiser is not firing anything to us that&#8217;s happening on-chain. They don&#8217;t need to do anything in terms of integration.” Instead, he explains, Spindl does all the “heavy lifting of indexing stuff on-chain.”



“If you were fully on-chain, like a <a href="https://blockworks.co/tag/defi">DeFi</a> protocol, you would literally need nothing to integrate with Spindl,” he says.



Martinez explains that elements of the attribution process are centralized and off-chain “because the compute is just too fast and there&#8217;s too much going on for it to be on-chain.” But, he explains, “that gets paid in a very oracle-like way to a <a href="https://blockworks.co/tag/smart-contracts">smart contract</a> that then does pay natively on-chain.”



“We don&#8217;t believe in decentralization as religion,” he says, “but we do think there&#8217;s a proper <a href="https://blockworks.co/news/vessel-web3-brand-building">Web3 way of building things</a>. We strike what we hope is the right trade-off.”



“To the extent that it should live on-chain for the sake of being transparent, composable and permissionless, we do build on-chain. To the extent that it&#8217;s a complicated compute, it would be expensive to put on-chain, we don&#8217;t.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG7283920770" width="100%"></iframe>







For Web3 to ever reach a billion users on-chain, Martinez says, “there has to be a way for me to turn money into users.”



“If that machine doesn&#8217;t exist, we&#8217;re not gonna get to a billion users on-chain. It&#8217;s just not gonna happen,” he says. “Something has to fix that disconnect. And we call that ads.”



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Web2 models for Web3 ad attribution don’t work — Spindl founder Martinez

Shalini Nagarajan

Crypto startups, engagement farmers and memecoin fans beware: UK authorities may soon come for crypto memes.&nbsp;



The Financial Conduct Authority (FCA) wants to modernize its rules around online financial product promotions to better enforce compliance on social media. 



Its most recent guidance, published in 2015, doesn’t mention crypto at all. The FCA has now opened a consultation on whether to bring crypto memes under the remit of those official UK rules.



“Firms are reminded that any type of communication is capable of being a financial promotion and subject to S21 [part of the law governing financial promotions],&#8221; the agency said.



&#8220;We have seen memes and other similar communications circulated on social media with users often not realizing they are subject to our rules.&#8221;



This means financial promotion restrictions could extend to memes on platforms like Twitter, Reddit and Telegram. Some projects (memecoins) <a href="https://blockworks.co/news/gensler-memecoin-outperforms-market" target="_blank" rel="noreferrer noopener">base almost their entire value proposition</a> on memes, with the FCA saying promotions featuring memes are &#8220;particularly prevalent&#8221; in crypto.


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=1024&amp;h=1024" alt="" class="wp-image-62133" width="479" height="509" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=1144 1144w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=283 283w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=965 965w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=242 242w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=246 246w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=206 206w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=75 75w" sizes="(max-width: 479px) 100vw, 479px" /><figcaption class="wp-element-caption">Example of a promotional crypto meme from FCA</figcaption></figure></div>


By providing clear guidelines on memes, the FCA aims to prevent misleading or deceptive practices in online promotional activities.



“We want people to stay on the right side of our rules, so we’re updating our guidance to clarify what we expect of firms when marketing financial products online,” said Lucy Castledine, the FCA’s director of consumer investments.&nbsp;



“And for those touting products illegally, we will be taking action against you.&#8221;



The FCA’s posturing comes as part of broader efforts to regulate crypto advertisements targeting UK consumers.



A marketing campaign for memecoin floki inu (<a href="https://blockworks.co/price/floki" target="_blank" rel="noreferrer noopener">FLOKI</a>), which included advertisements across the London Underground, was <a href="https://www.theguardian.com/technology/2022/mar/02/watchdog-bans-floki-inu-cryptocurrency-campaign-on-london-tube-elon-musk" target="_blank" rel="noreferrer noopener">shut down by UK authorities</a> last year.



Earlier this month, the regulatory authority <a href="https://blockworks.co/news/crypto-uk-ads" target="_blank" rel="noreferrer noopener">announced that crypto firms must comply with new advertising rules</a> by Oct. 8, or risk imprisonment or unlimited fines. 



Scrutiny of casual communications in financial promotions is happening outside the UK, too.&nbsp;



In February, a New York federal judge <a href="https://www.theregister.com/2023/02/27/emoji_financial_advice/">ruled</a> that emojis — rocket ships, money bags and stock charts — in promotions for Dapper Labs&#8217; NFT project NBA Top Shots could be financial advice implying potential returns on investment.



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Crypto memes could soon be regulated in the UK

Meta and Alphabet must implement stricter crypto advertising policies on its social media platforms within the European Union (EU), according to a complaint lodged by consumer group BEUC with the European Commission and consumer authorities.



On Thursday, BEUC said it called upon the Consumer Protection Cooperation Network — a group of European Union enforcement authorities — for more robust crypto rules on Instagram, YouTube, TikTok and Twitter.



BEUC is urging measures to be implemented that would prevent influencers from misleading consumers about crypto, among other actions. BEUC, otherwise known as the European Consumer Organization, is a collective of 46 independent bodies hailing from 32 countries.



In a <a href="https://www.beuc.eu/sites/default/files/publications/BEUC-X-2023-073_Hype_or_harm_The_great_social_media_crypto_con.pdf" target="_blank" rel="noreferrer noopener">report</a> titled &#8220;The Great Social Media Crypto Con,&#8221; BEUC stated that crypto investment products pose significant risks to consumers because of their high volatility and speculative nature.



It referred to instances in 2018 when Instagram (Meta) and YouTube (Google) banned cryptocurrency promotion but later allowed it under a weak approval process. This approach fails to protect consumers from misleading claims about crypto benefits and downplays the risks, BEUC said.



The report mentioned an incident in April 2023 when Twitter CEO Elon Musk <a href="https://www.theguardian.com/technology/2023/apr/04/twitter-changes-logo-to-dogecoin-cryptocurrency-image-in-apparent-late-april-fools-day-gag" target="_blank" rel="noreferrer noopener">changed</a> the microblogging site&#8217;s logo to <a href="https://blockworks.co/price/doge" target="_blank" rel="noreferrer noopener">dogecoin</a>, resulting in a 30% surge in value within a few hours.



“This again contributes to creating a positive perception of crypto among consumers and prevents them from clearly understanding the risks associated with them,” the group said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1584" height="910" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=1024&amp;h=1024" alt="" class="wp-image-58304" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=1584 1584w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Screen-Shot-2023-06-08-at-14.30.08.png?w=80 80w" sizes="(max-width: 1584px) 100vw, 1584px" /><figcaption class="wp-element-caption">The front page of BEUC&#8217;s report, co-funded by the European Union</figcaption></figure>



BEUC cited discovery of crypto advertisements on TikTok despite the platform’s ban on crypto-related content. The group further noted that influencer endorsement is a major concern as it often involves misleading advice that can harm consumers.



Kim Kardashian and boxer Floyd Mayweather are currently facing a class action lawsuit, which a US judge <a href="https://www.reuters.com/legal/litigation/kim-kardashian-floyd-mayweather-cant-evade-emax-crypto-investors-claims-judge-2023-06-07/" target="_blank" rel="noreferrer noopener">refused</a> to toss out, for allegedly promoting the now-defunct crypto token EthereumMax (EMAX) inappropriately on social media.



<h2 class="wp-block-heading">EU already passed sweeping crypto regulation</h2>



The Market in Crypto Assets (MiCA) regulation is <a href="https://blockworks.co/news/european-parliament-mica-doesnt-touch" target="_blank" rel="noreferrer noopener">pegged to regulate crypto assets</a> in the EU. But the law is not yet implemented and is expected to come into force only by early 2025.



“Crypto will be regulated soon with the new Market in Crypto Assets Regulation but this legislation does not apply to the social media companies benefiting from the advertising of crypto at the expense of consumers,” BEUC Director General Monique Goyen said in a statement.&nbsp;



“This is why we are turning to the authorities in charge of protecting consumers to ensure Instagram, YouTube, TikTok and Twitter fulfil their duty to protect consumers against crypto scams and false promises.”



Outside the EU, the UK&#8217;s leading financial regulator is also working on finalizing rules for crypto ads.



The Financial Conduct Authority (FCA) said this week it has <a href="https://blockworks.co/news/uk-new-crypto-marketing-rules" target="_blank" rel="noreferrer noopener">introduced new rules</a> that mandate clear risk warnings, prevent misleading advertisements and provide investors with the option to withdraw from investments within a specific timeframe.



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Meta, Alphabet Must Do More To Protect EU From Dodgy Crypto: BEUC

Ben Strack

The UK&#8217;s top finance regulator is currently in the process of finalizing rules concerning crypto marketing. This action is being taken because it says that there is a &#8220;growing mismatch&#8221; between consumers&#8217; investment decisions and their risk tolerance.



New regulations from the Financial Conduct Authority (FCA) require those promoting crypto assets to put in place clear risk warnings, ensure advertisements are not misleading and allow for investors to back out of potential investments within a set timeframe.



A policy statement published Wednesday said the latest rules “strikes the right balance between consumer protection and promoting potentially beneficial innovation.”



The regulator finalized rules last August to ensure firms marketing “high-risk investments” include better risk warnings, but noted at the time the regulations would not apply to crypto promotions.



Now, after considering feedback from <a href="https://blockworks.co/news/uk-crypto-regulation-in-the-works">a February proposal</a>, the FCA’s rules around crypto promotion are “near final,” according to the policy statement.&nbsp;



They are expected to take effect on Oct. 8 after a four-month transition period.



&#8220;It is up to people to decide whether they buy crypto, but research shows many regret making a hasty decision,” Sheldon Mills, the FCA’s executive director of consumers and competition, said in a statement. “Our rules give people the time and the right risk warnings to make an informed choice.&nbsp;&nbsp;



To legally promote crypto assets to consumers, people and businesses must be “authorized,” registered with the FCA or communicating in compliance with an exemption. Promotions not made using approved methods are punishable by up to 2 years in prison, fines, or both.&nbsp;



The new rules also require those marketing crypto assets to UK consumers to introduce a 24-hour “cooling-off period” for first-time investors with a firm.&nbsp;



This would prohibit a company or individual to send a consumer what the FCA calls a Direct Offer Financial Promotion (DOFP) unless that consumer reconfirms their request at least 24 hours later.&nbsp;



“This is intended to ensure that extra protections kick in before consumers are in a position — as a result of the DOFP — to take the crucial step towards placing their money in the investment,” the FCA’s policy statement notes.



​​Susannah Streeter, head of money and markets at financial services company Hargreaves Lansdown, labeled the cooling-off period one of the more significant requirements.&nbsp;



In particular, she noted, it helps novice users of exchanges who might get “cold feet” when it comes to crypto investments.&nbsp;



“This may help reduce the pile-on effect with some coins surging to eye-watering levels spurred on by frantic purchases driven by the [fear of missing out] effect,” Streeter added. “The FCA is clearly worried that far too many consumers are gambling away their money, desperate to catch a ride upwards, no matter how risky the journey is.”



<h2 class="wp-block-heading">More crypto holders to protect</h2>



The new rules come as the number of crypto holders in the UK more than doubled in a one-year span, according to FCA survey findings published Wednesday.&nbsp;&nbsp;



Conducted in August 2022, the survey gathered responses from more than 2,000 people in the country. UK adults holding crypto assets numbered roughly 5 million at the time, according to FCA findings — up from 2.3 million in 2021.



The most common reason for purchasing crypto assets — as reported by 40% of respondents — remains “as a gamble,” according to the FCA findings. Roughly 30% of those surveyed said they regretted purchasing cryptoassets.



In terms of crypto promotion, 36% of adults have digested crypto-related advertisements. Eighteen percent of crypto users reported being influenced to purchase such assets because of advertising.



The FCA regulations also follow the SEC’s crackdown on crypto exchanges in the US. The securities regulator <a href="https://blockworks.co/news/binance-changpeng-zhao-face-sec-charges">brought lawsuits against crypto exchanges Binance</a> and <a href="https://blockworks.co/news/sec-sues-coinbase-allegations">Coinbase</a> on Monday and Tuesday, respectively, for allegedly operating unauthorized exchanges and other securities violations —&nbsp;



The exchanges have denied wrongdoing.&nbsp;



Binance.US said in a tweet that the SEC filing is “unjustified by the facts, by the law, or by the Commission’s own precedent.” Coinbase Chief Legal Officer Paul Grewal said Tuesday that the SEC’s enforcement-only approach in the absence of clear crypto guidelines hurts companies like Coinbase “that have a demonstrated commitment to compliance.”



“It’s clear the FCA recognizes the damage that can be done to overall investor confidence when such high-risk investments are bought by people who seem woefully unaware of the risks,” Streeter said. “However, it knows it’s also walking a tricky tightrope.”&nbsp;



She added: “It recognizes these beefed-up safeguards are needed to ensure consumers are more protected from another FTX style implosion, but at the same time it doesn’t want to quash innovation in the digital coin and blockchain space.”



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UK Regulator’s New Crypto Rules Include ‘Cooling-off Period’ for Investors

<div id="highlights-block_63592498841c6" class="highlights">
 <ul>
 <li>Google’s quarterly ad revenue dropped 2% to $7.1 billion as advertisers slashed budgets</li>
 <li>YouTube ad revenue fell for the first time since the division began reporting performance in 2020</li>
 </ul>
 
</div>



Internet giant Google is seeing some financial pain as advertisers, including crypto firms, pull back on their spending alongside rising inflation.



Parent company Alphabet on Tuesday posted its <a href="https://abc.xyz/investor/static/pdf/2022Q3_alphabet_earnings_release.pdf" target="_blank" rel="noreferrer noopener">third-quarter earnings</a> — a quarterly net profit of $13.9 billion — down 27% from a year ago, missing analyst estimates of $16.9 billion. Revenue climbed 6% to $69.1 billion, falling short of the $71 billion expectation.



The Mountain View, California-based company appears to have been affected by the crypto winter, rising interest rates and fears of slowing growth as the global economy is still reeling from the pandemic and <a href="https://cms.blockworks.co/tag/ukraine/" target="_blank" rel="noreferrer noopener">Russia’s war in Ukraine</a>.



Philipp Schindler, Google’s chief business officer, said in the <a href="https://seekingalpha.com/article/4549115-alphabet-inc-goog-q3-2022-earnings-call-transcript" target="_blank" rel="noreferrer noopener">earnings call</a> that the slump was driven in part by crypto companies and other financial firms trimming ad spending.



“In the third quarter, we did see a pullback in spend by some advertisers in certain areas and search ads,”&nbsp; he said. “For example, in financial services, we saw a pullback in the insurance, loan, mortgage and crypto subcategories.”



Schindler didn’t elaborate on which crypto subcategories contributed to the slide, but the company’s <a href="https://support.google.com/adspolicy/answer/7645254?hl=en#zippy=%2Cnorth-and-south-america" target="_blank" rel="noreferrer noopener">strict crypto ads policy</a> is designed to shut out shady advertising or brazen scams.&nbsp;



Google didn’t return Blockworks’ request for comment by press time.



Google’s advertising revenue from YouTube fell 2% to $7.1 billion, the first time the division reported a loss. Meanwhile, revenue from Google search ads rose 4.2% to $39.5 billion, but but the division missed forecasts for 8% growth.



Alphabet CEO Sundar Pichai described the period as a “tough time in the ad market,” and Chief Financial Officer Ruth Porat blamed the year-on-year slump on “further pullbacks in advertiser spend.”



The cryptocurrency market has trended downward this year, hit by a mix of recessionary fears and the collapse of the <a href="https://cms.blockworks.co/tag/terra/" target="_blank" rel="noreferrer noopener">Terra</a> ecosystem, with 2021 darling assets such as Solana down over 90% year to date. Price volatility forced major industry players including <a href="https://cms.blockworks.co/coinbase-cut-workforce-ceo-wary-of-potential-recession/#:~:text=Coinbase%20To%20Cut%2018%25%20of%20Workforce%2C%20CEO%20Wary%20of%20Potential%20Recession,-Coinbase's%20decision%20to&amp;text=Coinbase%20will%20slash%20its%20workforce,CEO%20Brian%20Armstrong%20on%20Tuesday." target="_blank" rel="noreferrer noopener">Coinbase</a>,<a href="https://cms.blockworks.co/blockchain-com-slashes-25-of-workforce-cuts-exec-compensation/" target="_blank" rel="noreferrer noopener"> Blockchain.com </a>and <a href="https://cms.blockworks.co/cryptocurrency-lender-blockfi-set-to-cut-staff-by-a-fifth/" target="_blank" rel="noreferrer noopener">BlockFi</a> to rejig operations and lay off thousands of employees. 



Pay-per-click (PPC) marketing is generally not what Web3 businesses do, and not what they have historically been doing, according to Adrian Krion, founder and CEO of blockchain gaming startup Spielworks.



“Right now, [lower ad spending] is also related to the low interest and the bear market,” he told Blockworks, adding that businesses in the industry are expected to rely on proven practices like content and viral marketing until Google’s <a href="https://support.google.com/adspolicy/answer/12055790?hl=en" target="_blank" rel="noreferrer noopener">financial product and services policy</a> is made clearer.



<h3 class="wp-block-heading">Google bets on Coinbase for revenue diversification</h3>



Despite the bearish sentiment, the crypto winter is not broadly seen as a terrible thing for the industry as a whole, as times of slow growth are helpful in rooting out conceptually weak projects and carving out space for others to innovate.



Google appears to accept that the drawdown in revenue from crypto-related advertisers won’t last long. Earlier this month, it inked a <a href="https://cms.blockworks.co/coinbase-stock-pops-on-google-deal-to-accept-crypto-for-cloud/" target="_blank" rel="noreferrer noopener">deal with Coinbase</a> to soon begin accepting crypto payments from its cloud customers.



Lars Seier Christensen, chair of Concordium and founder of Saxo Bank, said Google’s new partnership is a “general endorsement of the crypto space” where an increasing number of businesses accept crypto as viable tender for goods and services. 



“But more importantly, it’s unquestionable that Google has done this to gain additional market share for its growing cloud business. This means that Google has recognized a real business potential in the equally growing number of crypto native businesses,” he added.



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Google Summer Ad Business Falls After Crypto Winter

<div id="highlights-block_63505f4e5b4e3" class="highlights">
 <ul>
 <li>Blockchain gaming company Limit Break plans to feature its DigiDaigaku NFT collection in the Super Bowl spot it bought for $6.5 million</li>
 <li>OKX seeking to create “aspirational” ad about the potential of Web3, OKX Chief Marketing Officer tells Blockworks</li>
 </ul>
 
</div>



Just like 2022’s NFL season, the crypto bear market — which has lasted much longer — trudges on. And while many have cut costs, not all crypto firms are backing down from spending. Some are even gearing up to dish out millions of dollars on Super Bowl ads to build brand awareness.&nbsp;



The 2022 Super Bowl offered <a href="https://cms.blockworks.co/super-bowl-ads-spark-public-interest-coinbase-site-crashes-from-traffic/" target="_blank" rel="noreferrer noopener">a spotlight on the crypto industry</a> less than three months after bitcoin (BTC) and ether (BTC) hit all-time highs, featuring advertisements from FTX, Coinbase, Crypto.com and others. The price of BTC and ETH are each down more than 70% from those peaks.



Though a more-tempered representation is expected this time around, blockchain gaming company Limit Break said last week it bought a Super Bowl ad for $6.5 million. Crypto exchange OKX is also planning to purchase a television spot for the game, Chief Marketing Officer Haider Rafique told Blockworks.&nbsp;



Rafique estimated the cost — between the ad itself, as well as creating the idea for and producing the commercial — could total more than $10 million. He called the company’s recent <a href="https://www.youtube.com/watch?v=6U2Nai5xVvA" target="_blank" rel="noreferrer noopener">“What is OKX?”</a> campaign a preamble to its 2023 marketing efforts, starting with the Super Bowl.



The ad is likely to focus on OKX’s self-custody Web3 wallet, Rafique said.&nbsp;&nbsp;



“When you see a Super Bowl ad from us, it will be about not the future of crypto or finance, but it will likely be about the future of Web3, and the ability for people to read, write and own on the web — and what does that look like for entrepreneurs, for small businesses, for creators and all of us,” he added.



The exchange purposefully held back on marketing during the bull market, Rafique said, allowing it to push forward with marketing initiatives in recent months while competitors have pulled back.&nbsp;



The exchange, for example, <a href="https://cms.blockworks.co/crypto-exchange-okx-inks-f1-mega-deal/" target="_blank" rel="noreferrer noopener">revealed a partnership with Formula 1’s McLaren Racing</a> in a multi-year deal worth “hundreds of millions” in May.&nbsp;



“When the market goes down, people have more skepticism around our industry,” Rafique said. “That’s the time when we should be doing storytelling.”



<h3 class="wp-block-heading">A spotlight on NFTs</h3>



While OKX has not yet finalized its media buy for the Super Bowl, Limit Break has.&nbsp;



The company, founded by mobile game creators Gabriel Leydon and Halbert Nakagawa, is set to feature its DigiDaigaku NFT collection in the television spot. Limit Break gave away the collection during a free mint in August around the time the company raised $200 million from Buckley Ventures, Standard Crypto, Paradigm Ventures, FTX, Coinbase Ventures and others.



The company said in a statement last week that the ad would include a &#8220;Web3 experience&#8221; but declined to share specifics.



“I can assure you that you haven&#8217;t seen what we&#8217;ll be coming out with,” Leydon told Blockworks in an email. “Having this ad is exciting for us because prior to the Super Bowl, there&#8217;s going to be millions of people who have never heard of an NFT.”&nbsp;



The promotion of an NFT collection during the Super Bowl is especially interesting, according to Coinbound CEO Ty Smith, as people will be able to see the effect of the ad on the collection’s volume and price in real time.&nbsp;



“I’m not sure there’s too many products that have that type of insight possible and, as marketers, is something we are watching,” the crypto marketing firm founder said.



By gaining access to roughly 50 million people watching the Super Bowl on television and an expected additional 10 million watching online, Leydon said that the commercial purchase is a way to grow the current DigiDaigaku community that currently consists of roughly 20,000 followers across Twitter and Discord.



<h3 class="wp-block-heading">Who will buy again?</h3>



FTX, Coinbase, Crypto.com and eToro each made ad buys during the US Super Bowl broadcast in February, as <a href="https://www.youtube.com/watch?v=Ut3m9OK1c7Y" target="_blank" rel="noreferrer noopener">FTX</a> and <a href="https://www.youtube.com/watch?v=FUygWsIj_GU" target="_blank" rel="noreferrer noopener">Crypto.com</a> ran commercials featuring Larry David and LeBron James, respectively.



FTX CEO Sam Bankman-Fried said during a discussion hosted by the Bipartisan Policy Center last week that celebrity-fueled crypto ads are less about gaining retail customers than they are about fostering institutional relationships — a concept he admitted seemed counter-intuitive.



“It’s a foot in the door, is what it really is,” he said. “It’s a, ‘Please stop declining our meeting requests and have the meeting so that we can talk about a way we can potentially work together.’”



<a href="https://www.youtube.com/watch?v=eIUD_NE1BDo&amp;t=3s" target="_blank" rel="noreferrer noopener">Coinbase’s 60-second advertisement</a> in February featured a QR code that directed people to a promotional page on its website offering new users free bitcoin. <a href="https://www.youtube.com/watch?v=7O4rP3qwlfo&amp;t=29s" target="_blank" rel="noreferrer noopener">The 30-second ad by eToro</a> promoting “social investing” mentioned crypto several times.



Spokespeople for the four companies declined to comment on whether they would advertise during the Super Bowl again.&nbsp;



Crypto platform Bitbuy was the only firm in the space to advertise on the Super Bowl’s Canadian broadcast. <a href="https://www.youtube.com/watch?v=aI3LNq_lres" target="_blank" rel="noreferrer noopener">The Bitbuy commercial</a> featured NBA star Kyle Lowry.&nbsp;



Though the company’s online marketing spend in the year’s second half has remained consistent to pre-market downturn levels, according to Binu Koshy, Bitbuy’s director of communications, it greatly reduced its offline marketing spend, he said, which includes Kyle Lowry commercials.



“[It’s] not because we don&#8217;t believe in the medium, but because we felt the messaging in the commercials were not reflective of the current market realities, so it wouldn&#8217;t perform,” Koshy said. “We&#8217;ve also noticed that presently none of our top competitors here in Canada are advertising on offline media channels that they were in the past. Obviously that could change.”



Though Koshy said he could not comment on whether the company would run an ad in the 2023 Super Bowl, he noted Bitbuy has “ambitious marketing plans” for next year.&nbsp;



“We will continue to promote the benefits of using a regulated and locally based crypto-trading platform like Bitbuy over unregulated international exchanges,” Koshy said.&nbsp;



<h3 class="wp-block-heading">A different message?</h3>



There may be fewer digital asset-related ads during the 2023 Super Bowl, said Keli Callaghan, a partner at Arrington Capital who formerly led marketing at Algorand. But many entities in this space have a long-term vision and recognize the need for continued education, she added.



“I hope that those that do come to light will be more impactful in terms of educating the US more broadly on the real benefit of being able to exchange value in decentralized models and expand financial participation,” Callaghan said.



Coinbound CEO Ty Smith said he expects crypto messaging during the Super Bowl to have a bit more “gravitas” and foresees the major players positioning crypto as an interesting addition to an investment portfolio.



“The markets are down and a lot of people got burned last year,” Smith said. “Everyone knows that, and I think aware marketing teams are going to acknowledge it while still [educating] viewers about the long-term possibility of Web3.”



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What Crypto Super Bowl Ads Can We Expect in 2023?

Morgan Chittum

<div id="highlights-block_623a1fbad4347" class="highlights">
 <ul>
 <li>The UK Advertising Standards Authority previously scrutinized ads from Coinbase</li>
 <li>Agencies in Spain and Singapore have also warned firms for promotions</li>
 </ul>
 
</div>



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) <a href="https://www.asa.org.uk/news/asa-enforcement-notice-continues-clampdown-on-misleading-and-irresponsible-crypto-ads.html" target="_blank" rel="noreferrer noopener">threatened</a> 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 &#8220;trivial” or “suitable for anyone.&#8221; Additionally, they can’t create a &#8220;fear of missing out&#8221; 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 <a href="https://www.fca.org.uk/publications/research/research-note-cryptoasset-consumer-research-2021" target="_blank" rel="noreferrer noopener">FCA report</a>.&nbsp;



Susannah Streeter, a senior investment analyst at British financial services company Hargreaves Lansdown, <a href="https://cms.blockworks.co/uk-government-seeks-to-boost-regulation-of-crypto-ads/" target="_blank" rel="noreferrer noopener">told Blockworks</a> 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 <a href="https://www.asa.org.uk/rulings/arsenal-football-club-plc-a21-1121873-arsenal-football-club-plc.html" target="_blank" rel="noreferrer noopener">Arsenal Football Club</a> for promoting crypto tokens to fans because it “failed to illustrate the risk of the investment.”



ASA’s enforcement notices follow <a href="https://www.cnmv.es/portal/verDoc.axd?t=%7B1cbaf61c-57c2-4830-bd6a-071f806795e2%7D" target="_blank" rel="noreferrer noopener">rules outlined by Spain’s national securities market commission</a> 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 <a href="https://cms.blockworks.co/singapore-issues-guidelines-targetting-crypto-promotions-to-general-public/" target="_blank" rel="noreferrer noopener">Jan. 18 urged</a> 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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UK Watchdog Clamps Down on Crypto Firms for ‘Misleading’ Advertisements

Sebastian Sinclair

<div id="highlights-block_6209c0166f009" class="highlights">
 <ul>
 <li>Coinbase&#8217;s site and app reportedly shut down briefly on Sunday following an influx of interest from its Super Bowl ad, though the site and app are back online and functioning as normal </li>
 <li>Super Bowl ads featured an array of companies, from FTX, eToro, Crypto.com and more</li>
 </ul>
 
</div>



Coinbase&#8217;s platform and app were temporarily forced offline on Sunday after it debuted its $14 million ad during the Super Bowl.



The ad, which features a floating QR code box bouncing around the screen for 60 seconds, directs to a <a href="https://drops.coinbase.com/" target="_blank" rel="noreferrer noopener">promotional page</a> on its website offering new users signups $15 in bitcoin. The ultra-minimalist retro-styled ad evoked early computer or console games from the 1970s and &#8217;80s.



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/eIUD_NE1BDo" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



Shortly after the ad went live to hundreds of millions of homes in the US, Twitter users began reporting issues connecting to the exchange&#8217;s website and app. It is the first ad Coinbase has spun up for the sporting event.



The mishap calls into question Coinbase&#8217;s stability during times of large site traffic. The platform shut down on several occasions over the last two years, following erratic trading and subsequent dips in bitcoin&#8217;s price.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Coinbase?src=hash&amp;ref_src=twsrc%5Etfw">#Coinbase</a> how can you drop this ad and then for the app to crash <a href="https://twitter.com/hashtag/SuperBowl?src=hash&amp;ref_src=twsrc%5Etfw">#SuperBowl</a> <a href="https://t.co/FAbvRnudsK">pic.twitter.com/FAbvRnudsK</a>&mdash; Vanessa 🗺 (@rurisan) <a href="https://twitter.com/rurisan/status/1493014031338283008?ref_src=twsrc%5Etfw">February 14, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The issue, which lasted just minutes, has since been resolved, and users can now access the website along with the promo page which features messages including &#8220;Less Talk, More Bitcoin&#8221; and &#8220;WAGMI.&#8221;



At press time, Coinbase was experiencing issues with Google Pay and directed customers to use alternative payment methods, according to its <a href="https://status.coinbase.com/" target="_blank" rel="noreferrer noopener">status page</a>.



While the influx of interest briefly forced the platform&#8217;s website and app offline, Coinbase&#8217;s Chief Product Officer Surojit Chatterjee <a href="https://twitter.com/surojit/status/1493031594109538304?s=20&amp;t=oBBf-y2Mt1rbTDVx0aOKyw" target="_blank" rel="noreferrer noopener">tweeted</a> Sunday that Coinbase had experienced &#8220;more traffic&#8221; than it had &#8220;ever encountered,&#8221; resulting in engineers having to throttle traffic.



&#8220;We are now back and ready for you,&#8221; Chatterjee said in his tweet. &#8220;Humbled to have been witness to this.&#8221; 



<h3 class="wp-block-heading">Other industry Super Bowl ads</h3>



A variety of industry participants were also present during the ad breaks at the Super Bowl.



Comedian, writer, director and actor <a href="https://en.wikipedia.org/wiki/Larry_David" target="_blank" rel="noreferrer noopener">Larry David</a> was featured in an ad for crypto derivatives exchange FTX, comparing the platform to famous inventions throughout history:



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/BH5-rSxilxo" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



As part of the campaign, FTX promised four viewers who retweeted <a href="https://twitter.com/FTX_Official/status/1493028625825869828?s=20&amp;t=hP1VQ1TpqS0ifQXLlZWzKg" target="_blank" rel="noreferrer noopener">the official tweet</a> of the ad will win 7.54 bitcoins — the commercial aired at 7:54 pm ET.



The Crypto.com exchange featured a skit with basketball star Lebron James imparting wisdom to his younger self:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">In his moment of truth, <a href="https://twitter.com/KingJames?ref_src=twsrc%5Etfw">@KingJames</a> called it. Fortune Favors the Brave <a href="https://twitter.com/hashtag/FFTB?src=hash&amp;ref_src=twsrc%5Etfw">#FFTB</a> <a href="https://t.co/Snhpit3vnh">pic.twitter.com/Snhpit3vnh</a>&mdash; Crypto.com (@cryptocom) <a href="https://twitter.com/cryptocom/status/1493033811105378307?ref_src=twsrc%5Etfw">February 14, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Championing &#8220;social investing,&#8221; eToro&#8217;s ad depicted a swarm of flying retail traders set to a cover of &#8220;Fly Me To the Moon&#8221; — the classic 1950s ballad by <a href="https://www.songhall.org/awards/winner/Fly_Me_To_The_Moon" target="_blank" rel="noreferrer noopener">Bart Howard</a> made famous by <a href="https://www.youtube.com/watch?v=mQR0bXO_yI8" target="_blank" rel="noreferrer noopener">Frank Sinatra</a> during NASA&#8217;s Apollo moon missions. 



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/7O4rP3qwlfo" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



Canadian exchange Bitbuy <a href="https://cms.blockworks.co/exchanges-compete-to-grab-super-bowl-spotlight/" target="_blank" rel="noreferrer noopener">ran an ad</a> with its own sports star, Kyle Lowry, while <a href="https://www.youtube.com/watch?v=LcmAlpIp3oM" target="_blank" rel="noreferrer noopener">Facebook</a> and <a href="https://www.youtube.com/watch?v=ljMvZbYDl2E" target="_blank" rel="noreferrer noopener">TurboTax</a> marketing buys also touched on crypto.



Last year, Super Bowl LV generated $434.5 million of in-game ad revenue, with an average price of around $6.5 million per 30-second segment. For every dollar spent for the coveted prime time slots, an average return on investment of $4.60 was received — more than four times the initial spend, according to data by provider <a href="https://www.kantar.com/north-america/inspiration/advertising-media/2021-super-bowl-generated-435-million-dollars-in-ad-revenue#:~:text=Super%20Bowl%20LV%20saw%20a,%245%20million%20the%20previous%20year.&amp;text=Automotive%20continued%20to%20lead%20the,million%20less%20compared%20to%202020." target="_blank" rel="noreferrer noopener">Kantar</a>.



Macauley Peterson contributed reporting for this story.



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Coinbase Site Crashes From Traffic as Super Bowl Ads Spark Public Interest

<div id="highlights-block_61fb08e888489" class="highlights">
 <ul>
 <li>Andrew Forrest is bringing criminal proceedings against Facebook for using his image in crypto scam ads on the social media platform</li>
 <li>The billionaire said he was doing it for the people to shield them from future crypto scams by &#8220;criminal syndicates&#8221;</li>
 </ul>
 
</div>





Australian billionaire Andrew &#8216;Twiggy&#8217; Forrest has brought criminal proceedings against Facebook, alleging the company failed to prevent false cryptocurrency advertisements using his image on its platform.



The minerals mining magnate alleges Facebook, now Meta Platforms Inc., was &#8220;criminally reckless&#8221; for failing to take down the scam posts which have been ongoing since March 2019, according to a report by <a href="https://www.abc.net.au/news/2022-02-03/andrew-twiggy-forrest-launches-criminal-proceedings-facebook/100800630" target="_blank" rel="noreferrer noopener">ABC News</a> on Wednesday. Proceedings have been lodged in the Magistrates Court of Western Australia.



Forrest also alleges Facebook breached Australia&#8217;s money-laundering laws by doing little to stop the ads and that it &#8220;failed to create controls or a corporate culture to prevent its systems being used to commit crime.&#8221;



&#8220;I’m concerned about innocent Australians being scammed through clickbait advertising on social media,&#8221; Forrest said, as cited in the report. &#8220;I’m committed to ensuring that social media operators don’t allow their sites to be used by criminal syndicates.&#8221;



Charges have been made under Part 10 of the country&#8217;s Commonwealth Criminal Code with the blessing of the Attorney-General, per the report. 



&#8220;We take a multifaceted approach to stop these ads, we work not just to detect and reject the ads themselves but also block advertisers from our services and, in some cases, take court action to enforce our policies,&#8221; a spokesperson from Meta said in the report. &#8220;We&#8217;re committed to keeping these people [scammers] off our platform.&#8221;&nbsp;



It&#8217;s not the first time the social media giant has landed in hot water over crypto ad scams. In 2018, the issue reached a fever pitch, forcing Facebook to <a href="https://www.theguardian.com/technology/2018/jan/31/facebook-bans-ads-cryptocurrencies-scams" target="_blank" rel="noreferrer noopener">ban advertising</a> for anything related to the industry. At the time, the social media giant labeled the ads as being &#8220;frequently associated with misleading or deceptive promotional practices.&#8221; 



That decision was eventually overturned to only include initial coin offerings, according to its <a href="https://www.facebook.com/policies/ads/prohibited_content/prohibited_financial_products_and_services" target="_blank" rel="noreferrer noopener">advertising policies</a>. Some argue this change leaves more breathing room for scammers to exploit their victims, something, Forrest argues, Facebook has done little about.



&#8220;I want social media companies to use much more of their vast resources and billions of dollars in annual revenue to protect vulnerable people — the people who are targeted and fall victim to these horrible scams with their hard-earned savings,&#8221; said Forrest.



A hearing date has been set and will be held in the magistrate&#8217;s court on March 28.



Facebook parent company Meta Platforms&#8217; shares <a href="https://cms.blockworks.co/zuckerberg-still-confident-in-metaverse-plans-despite-stocks-20-slide/" target="_blank" rel="noreferrer noopener">fell 20% yesterday</a> following the release of its latest earnings report.



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Australian Billionaire Brings Criminal Case Against Facebook Over Fake Crypto Ads

<div id="highlights-block_61e6ee4b93e84" class="highlights">
 <ul>
 <li>The UK’s Advertising Standards Authority censured Arsenal Football Club last month for promoting tokens to fans without proper warnings</li>
 <li>The government’s plan follows similar efforts by agencies in Spain and Singapore</li>
 </ul>
 
</div>



The UK government shared plans to bolster its rules on crypto advertisements in an effort to protect consumers from misleading claims.&nbsp;



The plans call for bringing the advertising of cryptoassets under the rules of the Financial Conduct Authority (FCA) — the same standards that stocks, shares, and insurance products are held to, the UK government <a href="https://www.gov.uk/government/news/government-to-strengthen-rules-on-misleading-cryptocurrency-adverts" target="_blank" rel="noreferrer noopener">revealed Tuesday</a>.



The UK launched its Cryptoasset Taskforce in 2018, and Rishi Sunak, Chancellor of the Exchequer, said in a statement that the government is eager to support innovation in the crypto space.



“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest, but it’s important that consumers are not being sold products with misleading claims,” Sunak added. “We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.”



The number of consumers in the UK holding cryptocurrency was estimated to be 2.3 million, according to <a href="https://www.fca.org.uk/publications/research/research-note-cryptoasset-consumer-research-2021" target="_blank" rel="noreferrer noopener">an FCA report</a> published in June.



Though the Advertising Standards Authority (ASA) has been trying to respond to the complaints about misleading crypto promotions, the agency needed support from the FCA given the scale of the problem, according to ​​Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown. The ASA could only censure firms after the ads had been posted, she added.



The <a href="https://www.asa.org.uk/rulings/arsenal-football-club-plc-a21-1121873-arsenal-football-club-plc.html" target="_blank" rel="noreferrer noopener">ASA censured Arsenal Football Club</a> last month for promoting tokens to fans without proper warnings. The watchdog told the organization to ensure its future ads “did not trivialise investment in crypotassets” and make “sufficiently clear that the value of investments in cryptoassets was variable and cryptoassets were unregulated.”



The UK rule changes will come through legislation to amend the Financial Promotion Order, which sets out the investments and activities to which the financial promotion regime applies, according to the government’s announcement.



<blockquote class="wp-block-quote">“Once this new legislation is passed, firms promoting crypto products will have a much higher bar to jump to show that ads are fair, clear and not misleading and companies could face hefty fines for serious breaches,” Streeter explained in an email. </blockquote>



The UK government’s plans follow <a href="https://www.cnmv.es/portal/verDoc.axd?t=%7B1cbaf61c-57c2-4830-bd6a-071f806795e2%7D" target="_blank" rel="noreferrer noopener">rules outlined by Spain’s national securities market commission</a> on Monday. The agency establishes that the advertising of cryptoassets must include “clear, balanced, fair and non-misleading content and information on the risks in a prominent manner,” among other measures.



The Monetary Authority of Singapore (MAS) also <a href="https://cms.blockworks.co/singapore-issues-guidelines-targetting-crypto-promotions-to-general-public/" target="_blank" rel="noreferrer noopener">released guidelines Monday</a> urging that digital payment tokens providers should not downplay the risks of crypto trading. Regulated providers, including banks and financial institutions, are now barred from promoting their crypto services to the public through any means except through their own websites, social media accounts or mobile applications.



In the US, <a href="https://cms.blockworks.co/voyager-estimated-quarterly-revenue-doubles-despite-lawsuit/" target="_blank" rel="noreferrer noopener">a complaint filed against Voyager Digital</a> last month alleges that the firm is “targeting unsophisticated investors with false and misleading promises of reaping large profits in the cryptocurrency market.” A Voyager spokesperson called the action “absolutely spurious and without any merit.”



“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. “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.”



The price of bitcoin was about 41,600, as of 11:30 a.m. ET, according to CoinGecko — down nearly 40% from its all-time high of more than $68,000 in November. 




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