UK watchdog slaps crypto industry with warning over ads
The UK’s advertising watchdog has fired a warning shot at the crypto industry amid a crackdown on misleading financial promotions.
The Advertising Standards Authority (ASA) has today sent out an Enforcement Notice to over 50 companies which advertise digital assets instructing them to bring adverts in line with fresh rules. Failure to comply with the guidelines will result in sanctions the regulator warned, revealing that the ASA will work closely with the Financial Conduct Authority to monitor ads.
“We will continue to work closely with the ASA to tackle unclear or misleading crypto advertising,” said Sarah Pritchard, the executive director of markets for the FCA. “People should be wary of any promotion promising high investment returns and do further research before investing… Those who invest in crypto assets should be prepared to lose all their money.”
Crypto promotions have become a “red alert” priority issue for the ASA amid an explosion of interest in the digital asset space which has attracted 2.3m UK investors.
“Crypto has exploded in popularity in recent years,” commented the chief executive of the Advertising Standards Authority, Guy Parker.
“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,” he continued.
Crypto adverts are required to clearly state that digital assets are unregulated and that the value of investments is variable. The regulator will take action against promotions which trivialise crypto investments, suggesting they are simple, easy or suitable for everyone and adverts which create a sense of urgency to create FOMO.
Today’s notice continues the ASA’s work in clamping down on crypto adverts. Arsenal football club, crypto exchange Coinbase and Papa John’s pizza are amongst companies which have already faced punitive action from the regulator over crypto adverts.
The FCA is preparing to turn the screws on advertising for high risk investments including crypto in a bid to protect customers. In January, the watchdog published a consultation outlining proposals that will force companies to provide much more prominent warnings on high-risk investment products, prevent companies from offering incentives to encourage investments and prevent crypto adverts targeting a mass audience.
Read more: FCA prepares to turn screws on crypto advertising