In the UK, crypto ads are in the crosshairs of the ASA’s Enforcement Notice, which has issued guidance that advertisers should rely on for their cryptocurrency ads.
UK: crypto ads monitored by ASA’s Enforcement Notice
The ASA’s Enforcement Notice has reportedly issued an enforcement notice to more than 50 companies that advertise cryptocurrencies. The aim is to instruct them to review their ads and ensure that they understand and comply with the rules so that consumers are treated fairly, while condemning misleading and irresponsible cryptocurrency advertisements.
Specifically, the ASA’s Enforcement Notice provides this very guidance to the cryptocurrency industry on which advertisers should rely for their crypto ads.
Amongst others, the guidance states that the ad must clearly state that cryptocurrencies are not regulated in the UK and that the value of investments is variable and can fall, or they must not state or imply that investment decisions are trivial, simple, easy or suitable for anyone.
The ASA’s Enforcement Notice also said it works closely with the Financial Conduct Authority (FCA) to take action against those who appear unable or unwilling to comply with the rules.
UK: which crypto ads are involved
The ASA’s Enforcement Notice guidelines specify that the notice applies to crypto advertisements, crypto-exchange ads and other ads or promotions involving the transfer, sale or supply of cryptocurrency, which are targeted at UK consumers or which are targeted globally on behalf of UK-based advertisers.
In this regard, Guy Parker, Advertising Standards Authority Chief Executive, said:
“Crypto has exploded in popularity in recent years. 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, also commented on the news:
“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. Crypto assets remain unregulated and those who invest in them should be prepared to lose all their money”.
Like financial products
Earlier this year, the UK government announced that it would create legislation that equates crypto advertisements with financial promotions.
So, as early as that moment, cryptocurrency businesses were backed into a corner and began to fall under the FCA’s strict rules.
Therefore, crypto advertisements had to adapt to the standards imposed on financial promotions and insurance products.
This move by the UK government is intended to encourage financial innovation but also to prevent misleading products from being marketed and purchased.
Source: https://en.cryptonomist.ch/2022/03/22/uk-crypto-ads-crosshairs/