The U.K.’s ASA Orders Over 50 Crypto Advertisers to Review Misleading Ads
The Advertising Standards Authority (ASA) of the United Kingdom has issued a fresh Enforcement Notice to more than 50 bitcoin (BTC)-related businesses, mandating them to review their ads or get reported to the Financial Conduct Authority (FCA), according to a statement on March 22, 2022.
ASA Puts Crypto Firms on the Hot Seat
The United Kingdom’s Advertising Standards Authority (ASA), a self-regulatory and non-statutory organization in charge of the country’s advertising industry, has released a fresh ‘red alert’ notice, mandating crypto businesses to review their misleading or irresponsible ads before May 2, 2022.
According to a statement released by the advertising regulator on March 22, 2022, it has dished out an Enforcement Notice to more than 50 crypto businesses whose ads are active in the UK, instructing them to promptly review the ads to ensure to make them compliant with its new rules.
The ASA Enforcement Notice is designed to provide guidance to crypto-linked companies on how to stick to the organization’s advertising conducts and warn offenders of the possible sanctions they could face if they fail to comply with the directives.
The ASA Guidance
The new ASA guidance requires crypto businesses to clearly state that digital assets are still unregulated in the United Kingdom and that the value of investments can change positively or negatively depending on market conditions.
ASA wrote:
“Advertisers must clearly state that cryptoassets are not regulated by the FCA. Ads must also make clear that cryptoassets are no protected by financial compensation schemes so that potential investors are aware that they would not be subject to protections afforded by either FOS or the FSCS.”
The ads must not state or give prospective investors the impression that investment decisions are simple, trivial, easy, or imply that investing in bitcoin and other cryptocurrencies is suitable for everyone. To make this point clearer, the ASA explained that
“In 2022, the ASA challenged whether an ad for cryptocurrency which featured a cartoon dog was irresponsible. The ASA acknowledged that the cartoon dog, who was wearing a Viking helmet, was the company logo, and that many cryptocurrencies have their origin in humor and memes. However, they considered that the use of cartoon imagery gave the impression that purchasing crypto was a light-hearted and trivial matter, and distracted consumers from the seriousness of an investment which was volatile and unregulated.”
Finally, the guidance states categorically that crypto ads must not imply a sense of urgency to invest in cryptocurrency or trigger a fear of missing out in the hearts of viewers or make it seem like digital asset investments are completely low-risk.
The Authorities have described its Enforcement Notice as a ‘red alert’ priority issue, hinting that it’ll collaborate with the Financial Conduct Authority to go all out to take action against entities that fail to comply with its guidance.
Guy Parker, the CEO of ASA said:
“Crypto has exploded in popularity in recent years. 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.”
In related news, crypto.news reported on March 12, 2022, that the FCA has mandated operators of all bitcoin ATMs in the country to shutter operations.
