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On March 2, 2022, the Advertising Standards Authority (“ASA”) issued a ruling regarding an advertisement published by Floki on the London Underground.
On March 2, 2022, the Advertising Standards Authority (“ASA”) issued a ruling regarding an advertisement published by Floki on the London Underground. The advertisement contained the Floki logo, an image of a cartoon dog wearing a Viking helmet. The text on the advertisement stated “Missed Doge? Get Floki.” In addition, text at the bottom of the ad stated that “Your investment may go down as well as up in value. Cryptocurrency is not regulated in the UK.”
The ASA received a complaint regarding these advertisements and began an investigation into whether the advertisements violated the Committee of Advertising Practice (“CAP”) code. Prior to running the advertisements, Floki received approval from CAP that the advertisements were in compliance with their code.
In the ruling, the ASA concluded that Floki violated the CAP code. First, it concluded that the advertisements took advantage of consumers’ inexperience or credulity by not making clear that tax could be payable on profits from investing. Second, it concluded that the advertisement irresponsibly exploited consumer’s fear of missing out and trivialized investment in cryptocurrency by using the phrase “Missed Doge? Get Floki.” Floki emphatically disagrees with these conclusions.
It is important to note that ads from major cryptocurrency brands like Coinbase, Kraken, Luno, and eToro have been similarly banned as crypto companies try to create mainstream awareness about cryptocurrency while adhering to regulatory guidelines.
The action from the ASA is that Floki may not run the particular advertisements that was banned again in the form that they were run during the London Underground advertisement campaign. No other action was implemented against Floki.
As stated above, Floki denies any of the allegations in the ASA complaint and disagrees with the conclusions reached by the ASA investigator. Floki did it’s very best to be compliant before running these ads and took CAP’s advice and guidance regarding what risk warnings and disclaimers needed to be included in the marketing campaign. At no point was it brought to Floki’s attention by CAP that there was a requirement for consumers to be advised on the implications of Capital Gains Tax on investments in cryptocurrency. Had this been brought to Floki’s attention, Floki would have followed such advice and included the information in their marketing campaign.
Further, Floki has retained attorney advice. Floki cannot find where in the CAP Code or ASA guidance it specifically sets out that information relating to Capital Gains Tax must be contained in any advert relating to cryptocurrencies or financial products generally. Floki denies that it violated any regulations, and it will take any action it must to ensure its legal rights are recognized.
With regard to the whether Floki was irresponsible with its advertisement, Code rule 14.1 states that financial products must be set out in a way that allows them to be understood easily by the audience being addressed. Floki asserts that its logo and wording of the advertisement allows the subject matter to be understood clearly by an informed consumer as well as the risks of investment in Floki being clearly signposted in the risk warning at the bottom of the Advert.
Floki also asserts that the phrase “Missed Doge? Get Floki,” is a legitimate advertising technique designed to capture the attention of an informed consumer. The marketing campaign itself did not mislead consumers in the investment of cryptocurrencies and the advertisement contained material information that consumers require to make informed decisions before engaging with Floki or investing generally in cryptocurrencies in compliance with CAP Code rules 3.1 and 3.3.
In short, Floki will continue to advocate for its right to advertise its product. There are no regulations that should prevent Floki from advertising in the way it did. At this time, Floki is not prevented from running advertisements in the United Kingdom, except that it is currently not allowed to run the exact marketing campaign as what was complained about in that form. Despite this recommendation from the ASA investigator, Floki will advocate for the rights of its project and its holders.