ASA bans ‘misleading’ and ‘irresponsible’ crypto ads

Dec 24, 2021 12:00:00 AM

What has happened?

In November 2021, the Advertising Standards Authority (ASA) announced that it was investigating various cryptoasset advertisements placed on websites including Yahoo Finance, YouTube, Daily Mail Online, Twitter and Facebook, and on a digital poster placed at London Bridge station.

The ASA’s remit covers regulated and non-regulated financial promotions in broadcast advertising under a Memorandum of Understanding with the FCA. As cryptocurrency services in general are unregulated, their advertising is covered by the ASA.

What do crypto firms need to know about cryptoasset advertising compliance?

In December 2021, seven ASA rulings were published concerning advertisements for cryptocurrencies which were held to be non-compliant as they were deemed to be taking advantage of consumers’ inexperience and failing to illustrate the risk of the investment. All of the advertisements ruled on were banned.

The investigations into these advertisements had been started by an ASA challenge rather than by any consumer complaint. The ASA had previously published on its website a statement about cryptoasset compliance that states;

We’re aware that people are concerned about crypto-asset advertising – particularly regarding cryptocurrencies and ‘non-fungible tokens’ (NFTs). This is a ‘red alert’ priority issue for us and we’re taking action.

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 recognise 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. To that end, we’re currently investigating a number of crypto-asset ads across different media, where we have concerns about:

lack of appropriate risk warnings
the trivialisation of investments in cryptocurrency
ads taking advantage of consumers’ inexperience or incredulity [sic]
irresponsible advertising (for example, creating a sense of urgency to invest).

We’ll be providing clarity around our expectations of crypto-asset advertising through these rulings, which we expect to publish in mid-December¹. We’ll then carry out proactive monitoring and enforcement to tackle non-compliant ads for crypto-assets.

¹ this publication has now seemingly been postponed until 2022

How can we help you?

If you’d like to know more about how we can help you with your crypto advertising arrangements, cryptoasset compliance or with any other regulatory compliance issues, our specialist financial crime and crypto team is here to help.

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