In a crypto’red alert,’ the watchdog bans seven ads.
The UK’s advertising watchdog has banned seven cryptocurrency advertisements.
Following concerns that many advertisements fail to fully convey the risks of investing, the Advertising Standards Authority (ASA) has declared that monitoring crypto assets, such as Bitcoin, is a “red-alert priority.”
A pizza chain’s promotion and Facebook ads for a large cryptocurrency exchange were among the prohibited ads.
According to the ASA, it hopes to issue new guidance on cryptocurrency advertising.
All seven advertisements or promotions were “banned for irresponsibly exploiting consumers’ inexperience and failing to illustrate the risk of the investment,” according to the statement.
The companies whose advertisements were found to be in violation of the rules were:
Coinburp: A Twitter account for the cryptocurrency trading platform Coinburp.
eToro (UK): This is a paid display advertisement for eToro, a stock and cryptocurrency trading platform.
Payward: An online cryptocurrency exchange’s digital poster.
Exmo Exchange: A video on YouTube promoting cryptocurrency exchange Exmo
Luno Money: An in-app advertisement for the cryptocurrency exchange service Luno.
Coinbase Europe: A Facebook ad purchased by Coinbase, a cryptocurrency exchange platform.
Papa John’s GB: A promotion on the website of the Papa John’s pizza restaurant chain as well as a Twitter post.
The banned Papa John’s website promotion advertised “free Bitcoin worth £10,” as well as “Save £15 when you spend £30 or more & get £10 worth of Bitcoin from Luno!”
The company said it was part of their annual “Bitcoin pizza day” celebration, which commemorates the exchange of two Papa John’s pizzas for 10,000 bitcoins in May 2010. Ten thousand bitcoins are now worth more than £350 million ($462 million).
The company claimed that the advertisement made no mention of cryptocurrency or its suitability for investment.
According to the chain, the “free” Bitcoin offer was not the same as a scenario in which a consumer was given the option to invest their own money in a financial product.
However, the ASA determined that the offer “trivialized what was a serious and potentially costly financial decision, particularly in the context of the intended audience, who were likely to have limited knowledge of cryptocurrency.”
The bans are part of a larger project that will result in updated guidance for crypto-asset advertising next year.
“Cryptoassets are a red-alert priority issue for us,” said Miles Lockwood, the watchdog’s director of complaints and investigations.
“Consumers must be aware of the risks associated with investing in crypto assets, and companies must ensure that their advertisements are not misleading or socially irresponsible in taking advantage of consumers’ lack of knowledge about these complex and volatile products,” he said.
The ASA stated that it will continue to review crypto-asset advertisements in the coming months, not just for cryptocurrencies but also for NFTs and fan tokens.