Following its ban of seven cryptocurrency adverts in December 2021 for "irresponsibly taking advantage of consumers' inexperience and for failing to illustrate the risk of the investment", the UK's advertising watchdog, the ASA, has banned a further two cryptocurrency ads so far in 2022.
In its statement in December, the ASA said monitoring crypto-assets, like Bitcoin, is a "red-alert priority" following concerns that many ads fail to fully convey the risks of investing.
Companies that wish to advertise their crypto-assets services and products to UK consumers need to tread carefully and ensure that their ads are compliant with UK advertising rules. The key themes common to these rulings are:
1. Companies should not be irresponsible and take advantage of consumers' inexperience and credulity, in particular by:
- portraying investment in cryptocurrency as straightforward and open to anyone regardless of circumstances or experience;
- not providing any information regarding potential capital gains tax paid on profits made from investing in cryptocurrency; and
- trivializing investment in cryptocurrency
2. Companies should not be misleading, in particular by:
- failing to illustrate the risk of investment (e.g. it can go down as well as up);
- not making clear cryptocurrency is unregulated; and
- not clarifying that past performance is not necessarily a guide to future performance
These bans concerned ads which the ASA considered to be aimed at a general audience not experienced in crypto-assets. The bans form part of a broader ASA project that will result in the ASA publishing updated guidance for the advertising of crypto-assets, expected to be released later during 2022.
The ads subject to these recent rulings were placed in various different medium including social media, websites, apps and digital advertising screen. It's clear from the rulings that where a marketing communication is constrained by time or space (e.g. where the ad is a social media post), the marketer must make the necessary information available to the consumer by other means (e.g. in the case of a social media post, via a link to a landing page that set outs that information. Having that information on a separate website page is not sufficient.)
One of the bans related to an ad displayed at London Bridge. This week the Guardian has reported that records show that TfL services displayed 39,560 crypto adverts from 13 firms in the six months between April and September 2021. Tfl stated that it is vetting ads before they run and is understood to be refusing any that use similar language to those that have been banned or investigated by the ASA. It has written to both the FCA and ASA seeking further guidance.
In the ASA statement in December 2021, Miles Lockwood, the watchdog's director of complaints and investigations, has made clear its intentions: "Crypto-assets are a red-alert priority issue for us. Consumers need to know about the risks of investing in crypto-assets and companies should make sure that their ads aren't misleading or socially irresponsible by taking advantage of consumers' lack of awareness around these complex and volatile products".
The ASA has said that it will continue to review crypto-asset ads over the next few months, not just for cryptocurrencies, but also for NFTs and fan tokens.
NFTs are continuing to reach a broader mainstream audience, with major brands launching NFTs and mainstream personalities starting to advertise them. Given that the ASA has continued to crack down on misleading social media ads involving high profile celebrities and influencers, anyone seeking to post an NFT ad involving celebrities and influencers should tread especially carefully.
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