Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
An independent advertising authority in the UK will begin to look for duplicitous crypto adverts and take them down to keep customers informed.
The United Kingdom’s Advertising Standards Authority (ASA), an independent advertising regulator, is going after crypto ads. According to a Financial Times report, the ASA will seek out and shut down crypto adverts that mislead customers.
According to the ASA director of complaints, Miles Lockwood, the authority has prioritized crypto adverts over general financial adverts. The ASA believes that there are quite a lot of questionable crypto adverts looking to take advantage of unsuspecting persons, and will work with major tech outfits to take down as many of these scam adverts as possible. Lockwood also says that the authority might require advertisers in the industry to ensure that their adverts carry certain disclaimers. The director said:
“We see this as an absolutely crucial and priority area for us. Where we do find problems, we will crack down hard and fast.”
The new ASA stand against crypto ads stems from the fact that crypto investments are not covered by the UK’s very stringent rules for the promotion of traditional financial products. However, the country has begun to look into the sector, specifically firing at ads considered misleading.
ASA Tackles Luno and Coinfloor
In late May, the ASA tackled crypto exchanges Coinfloor and Luno, for potentially misleading ads. Luno had initiated an ad campaign on public transportation in London, with “If you’re seeing Bitcoin on the Underground, it’s time to buy” as the tagline. According to the ASA, the ad was extremely misleading and masked crypto’s valitility. The ASA specified that the public would interpret “it’s time to buy” as a specific call to action. Interestingly, the ad campaign launched about a week after the price of Bitcoin fell by 30%.
Luno has promised to act more carefully in the future. However, Luno’s CEO, Marcus Swanepoel, did say that playing by the rules would be difficult if the UK’s regulatory stance was unclear. Swanepoel said:
“Honestly, we were under the impression that these ads were OK.”
The ASA continuously receives complaints from customers about misleading ads and has been cracking down on them based on these complaints. However, the authority will now do more. Furthermore, the ASA will comb through social media to regulate influencers who push crypto ads.
Crypto Adverts Don’t Drive Purchase – FCA
Regardless of the ASA’s clampdown, the UK’s financial regulator has a different view on how well advertisements drive crypto purchases. According to the Financial Conduct Authority (FCA) in a recent consumer survey publication, not many people see ads and buy crypto:
“Only a minority of people buy digital coins based on advertising, but those who do so tend to have worse outcomes.”
Back in 2018, the Cryptoassets Taskforce raised some alarm about crypto ads. Formed by the FCA, Treasure, and the Bank of England, the task force published a report expressing concern.
“Advertising regarding crypto assets, which is often targeted at retail investors, is not typically fair or clear and can be misleading. Adverts often overstate benefits and rarely warn of volatility risks…and the lack of regulation,” the report said.