UK ad regulator clamps down on six crypto exchanges for “misleading” and “irresponsible” marketing material
The Advertising Standards Authority (ASA) has made seven separate rulings against businesses advertising cryptocurrency exchange platforms, including eToro, Coinbase, CoinBurp, Payward Ltd, Luno Money and Exmo Exchange.
While crypto trading remains largely unregulated in the UK, the flurry of rulings released today (15 December) suggests the ASA is sharpening its claws and beginning to pay more attention to the emerging vertical and how it is advertised online.
One ruling concerned an advert by Papa John’s GB Ltd, which promoted the use of crypto exchange service Luno Money Ltd by offering £10 worth of Bitcoin for free to new customers that spent more than £30 on Papa John’s pizza.
The regulator considered the ad could encourage customers to engage in a high-risk investment without consideration, and trivialise a serious and potentially costly financial decision.
The ASA decided that such adverts must not appear again in the assessed format, as they “took advantage of consumers’ inexperience or credulity and trivialised investment in cryptocurrency”.
Enjoy 50% off when you spend £20 or more on pizza and sides and ALSO receive £10 worth of free Bitcoin! 🍕🙌🏼 You could also be in for the chance of winning a years’ supply of pizza or free Bitcoin worth £40,000!* @LunoGlobal🤩#Bitcoin #Pizza
*T&Cs apply: https://t.co/eF2ObVoUvK pic.twitter.com/PDI2VGGyv4
— Papa Johns UK (@PapaJohnsUK) May 17, 2021
As a result, they were considered to be irresponsible and in breach of the Committee of Advertising Practice (CAP) Code.
Further ads run by Luno, which were featured on other mobile applications including the Daily Mail Online app, were also ruled to be in breach of CAP rules by taking advantage of consumers’ inexperience or credulity by suggesting that investing in and trading cryptocurrencies was simple.
The bio section of a Twitter page for the CoinBurp exchange was also ruled to be misleading, as it suggested cryptocurrency investment was straightforward and that everyone could participate in it regardless of their personal circumstances, as well as failing to mention that Capital Gains Tax could be paid on profits earned from crypto investments.
The highly-popular Coinbase also came under fire for unclear advertising, and was told by the ASA to ensure that future ads make sufficiently clear that the value of investments in cryptocurrency is variable and can go down as well as up, and that Coinbase’s provision of trading services is currently unregulated.
Elsewhere, crypto exchange Exmo had further rulings made against it for ads published on a YouTube channel, while eToro was rapped for “irresponsible” and “misleading” ads featured on the Yahoo Finance website.
Payward Ltd, owner of online crypto exchange Kraken, was also reprimanded for physical ads at London Bridge train station, which did not include a clear risk warning for customers.