In the latest move from UK advertising regulators, they have decided to ban all crypto-related ads on social media. The ASA said that it has collected information about cryptocurrencies which suggests “that there is a real risk for consumers of losing their hard earned savings.”
The “is cryptocurrency legal” is a question that many people have been asking. The UK’s advertising regulator, the Advertising Standards Authority (ASA), has continued its crypto ad banning spree by banning an advertisement from cryptocurrency exchange CoinCorner.
The Advertising Standards Authority, or ASA, in the United Kingdom has issued a formal ban on two mobile app advertising from prominent trading site Crypto.com that advertised the convenience of acquiring cryptocurrencies like Bitcoin and collecting yield returns on digital assets.
The ASA, which has gained notoriety in the industry for their strict legislation on the proposed implications of a cryptocurrency advertisement, has flagged the marketing material for violating a number of financial watchdog rules, including not effectively stating the investment’s risk potential, abusing consumers’ lack of market understanding, and failing to specify the limitations of purchasing cryptocurrency with credit cards.
Crypto.com voluntarily removed the ad after the regulator raised concerns, but the company debated the nuances of the ads with the regulator, claiming that the initial ad, which was published on the Love Ball app on July 30, 2021, stated that users could “earn up to 8.5 percent p.a.” through yield investments, not specific crypto assets.
Similarly, according to Crypto.com’s written response, the subsequent ad, which appeared on the Daily Mail newspaper app on September 1 and stated, “Buy Bitcoin with credit card instantly,” was intended to highlight the speedy process of purchasing crypto assets on their platform, rather than directly advising consumers to engage in trading activities.
Coinbase and Kraken are among the companies whose advertisements have been banned by the UK Advertising Standards Authority.
Crypto.com’s marketing efforts in the United States have helped the company gain popular prominence. The creation of nonfungible tokens, or NFTs, in cooperation with the UFC, as well as the acquisition of a twenty-year lease for $700 million for the naming rights to the historic Staples Center now known as the Crypto.com Arena, have all boosted the platform’s goals.
The ASA concluded its investigation by advising Crypto.com that future marketing materials should make it “clear that the value of investments in bitcoin was unpredictable and might go down as well as up, and that cryptocurrency was uncontrolled.”
In addition, the material does not “irresponsibly take advantage of consumers’ lack of experience or credulity by irresponsibly encouraging consumers to invest in cryptocurrency using a credit card,” and that “using a credit card could be subject to higher interest rates, extra fees, and that some credit card issuers prohibit the purchase of cryptocurrency.”
The ASA penalized a number of crypto-related businesses for breaking advertising laws in their marketing activities in December 2021.
On December 15, the ASA accused Coinbase, Kraken, and eToro, among others, of misrepresenting investment material in their marketing campaigns, while on December 22, the ASA accused Arsenal FC and blockchain firm Chiliz of “taking advantage of consumers’ inexperience with crypto assets” in the issuance and subsequent promotion of the club’s fan token, $AFC.
Members of Parliament, or MPs, on the Treasury Select Committee had urged the Financial Conduct Authority, or FCA, earlier that month that cryptocurrency investments should not be equated to regular investments and that they may be used by criminals looking to launder money.
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