The UK's Advertising Standards Authority (ASA) has announced a series of bans on cryptocurrency-related advertising by six cryptocurrency companies: Coinbase, Kraken, eToro, Exmo, Coinburp and Luno. The decision was made in response to "a significant number of consumer complaints" about crypto ads, the authority says.
"In the absence of any other information to the contrary, we felt that consumers would have interpreted the announcements as meaning that investing in cryptocurrencies in general was simple and open to those with limited knowledge of the industry," the authority said.
Pizzas for bitcoin are also not good
A similar ban was made for Papa John's, for offering a "free Bitcoin" deal for every pizza purchased. Papa John's “Turn Pizza Into £ 10 Bitcoin” offering was made in partnership with Luno, a cryptocurrency exchange.
The ASA said cryptocurrency firms did not comply with its advertising rules regarding being "misleading" and "unsubstantiated". The regulator said the ads were "misleading because they did not illustrate the risk of the investment" and that these materials were therefore "irresponsible because they took advantage of consumers' inexperience or gullibility".
In a statement prior to the decision, the SAA said:
"Crypto assets have exploded in popularity in recent years, but there is a real danger that people may be lured into invest the life savings that they then lose on the basis of poor understanding. We recognize the important role we play in regulating ads to ensure they do not mislead consumers about the risks of a product or act irresponsibly in their promotion ”.
In a statement, Coinbase, one of the subjects of the ban, said they remained "committed to providing clear descriptions of the products that are offered on our platform, including Coinbase Consumer."
Misleading advertising?
According to the ASA, Coinbase's announcement "implied that there would be a similar guaranteed increase in the value of Bitcoin over the next decade", and that Coinbase Europe likewise "did not make it clear that past performance was not necessarily a guide to the future".
The ruling on Kraken's operator Payward Ltd was aimed at a digital poster released for Kraken in August 2021, which was displayed at London Bridge station. The ASA claims that Kraken's advertising material at the time was "misleading because it failed to sufficiently illustrate the risk of the investment"; and that because of this, the action was deemed irresponsible, given that the risk warning contained in the ad only lasted a full second. The ASA therefore found that the material presented consumers with "a great deal of information that would not have been fully read or understood even if it had been seen at all."
“They said the warning text was clear and equal in size to the text in the rest of the ad and was therefore legible and prominent enough for consumers. Kraken said the warning text explained that cryptocurrencies were volatile and that the services provided by Kraken were not regulated and as such consumers were unable to access the services ordinarily available for regulated financial products, "explains the authority. regulatory.
This recent round of cryptocurrency ad bans follows a similar move by the ASA in July, in which the regulator echoed sentiments of the Financial Conduct Authority's consumer warning about Binance and other cryptocurrency firms.
