The Advertising Standards Authority in the UK has issued an enforcement notice to more than 50 companies advertising cryptocurrencies, urging them to abide by ad rules or face bans and being reported to the Financial Conduct Authority.
In the notice – which the FCA has helped distribute and which marks a tightening of the ASA’s crypto clampdown – the ad watchdog has instructed the companies to review their ads and ensure they comply with rules so that consumers are treated fairly.
The notice gives guidance and warns that the ASA will monitor compliance and “implement sanctions if we do not see improvements”.
The ASA is working closely with the FCA to take action against transgressors, while its compliance team will conduct “follow-up monitoring” and if “problem ads persist after 2 May, we will take targeted enforcement action to ensure a level playing field”.
The ASA’s guidance decrees that advertisers should clearly state that cryptocurrencies are unregulated in the UK; that their value can fluctuate; that ads must not imply or state that investment decisions are trivial, simple, easy, low risk or suitable for anyone; and that ads must not imply a sense of urgency or promote a fear of missing out.
Crypto ads are attracting repeated censure from the ASA – most recently the watchdog banned an ad for Floki Inu – for largely the same reasons. These include being irresponsible, riding the current wave of popularity of cryptocurrency and exploiting consumer “fear of missing out”, and taking advantage of consumer inexperience and ignorance.
The ASA’s hardened stance comes just months after chancellor Rishi Sunak announced a crackdown on “misleading” crypto ads, saying that “crypto asset” advertising would be subject to rules set out by watchdog the FCA.
The government said it would achieve this via secondary legislation to the Financial Services and Markets Act 2000. The act rules that businesses cannot promote a financial product unless they are authorised by the FCA, Prudential Regulation Authority, or a firm that is approved by these two bodies.
Commenting on today’s announced crackdown, Guy Parker, the ASA’s chief executive, noted that crypto had “exploded in popularity in recent years”.
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. Working alongside the FCA, we’ll take strong action against any advertiser who fails to ensure that their ads are responsible.”
Sarah Pritchard, executive director of markets at the FCA, added: “We will continue to work closely with the ASA to tackle unclear or misleading crypto advertising. People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website.
“Those who invest in crypto assets should be prepared to lose all their money.”
Cryptocurrency ads are something of a bête noir for the ad industry. At the end of last year, the ASA issued seven bans for cryptocurrency marketing after scrutinising the craze sweeping the world.
Examples included a Twitter post by pizza delivery brand Papa John’s that offered “free bitcoin” in partnership with cryptocurrency exchange Luno. It was deemed to be irresponsibly trivialising investment and playing on consumer ignorance.
