The UK’s Advertising Standards Authority (ASA) has announced a slew of bans on crypto-related advertising from six crypto firms: Coinbase, Kraken, eToro, Exmo, Coinburp, and Luno. The decision was made in response to “a significant number of consumer complaints” about crypto ads, says the authority.
“In the absence of any other information to the contrary, we considered that consumers would interpret the ad[s] to mean that investment in cryptocurrency in general was simple and open to those with limited knowledge of the sector,” the authority stated.
A similar ban was made for Papa John’s, for offering a “free Bitcoin” deal for every pizza bought. Papa John’s “Turn pizza into £10 worth of bitcoin” offering was made in partnership with Luno, a crypto exchange.
The ASA said that the crypto firms were non-compliant with its advertising rules with regards to being “misleading” and “unsubstantiated”. The regulator asserted that the ads were “misleading because it failed to illustrate the risk of the investment” and that these materials were thus “irresponsible because it took advantage of consumers’ inexperience or credulity.”
In an earlier statement prior to the decision, the ASA said:
“Crypto-assets have exploded in popularity in recent years, but there’s a real danger that people may be drawn in to invest life savings that they later lose based on poor understanding. We recognize the important role we play in regulating ads to ensure they don’t mislead consumers about a product’s risks or act irresponsibly in their promotion.”
In a statement, Coinbase, one of the subjects of the ban, said that they remained “committed to providing clear descriptions of the products that are offered on our platform, including Coinbase Consumer.”
According to the ASA, Coinbase’s ad “implied there would be a similar guaranteed increase in Bitcoin value over the next decade,” and that Coinbase Europe similarly “did not make clear that past performance was not necessarily a guide for the future.”
The ruling on Kraken operator Payward Ltd, was aimed at a digital poster released for Kraken back in August 2021, which was displayed at the London Bridge station. The ASA asserts that Kraken’s ad materials at the time were “misleading because it failed to sufficiently illustrate the risk of the investment;” and that due to this, the action was deemed irresponsible, given how the risk warning contained in the ad only ran for one full second. The ASA thus considered the material to be presenting consumers with “a large amount of information that would not be fully read or understood even if it was seen at all.”
“They said the warning text was clear and of equal size to the text in the rest of the ad and that it was therefore readable and sufficiently prominent for consumers. Kraken said the warning text explained that cryptocurrency was volatile and that the services provided by Kraken were unregulated and as such consumers were not able to access services ordinarily available to regulated financial products.” the regulatory authority explains.
This recent batch of crypto ad bans follows a similar move by the ASA back in July, in which the regulator echoed the sentiments from the Financial Conduct Authority’s consumer warning on Binance and other crypto firms.