The UK‘s advertising watchdog has revealed it is planning a crackdown on cryptocurrency investment ads.
The Advertising Standards Authority (ASA) said ensuring marketing campaigns for unregulated digital currencies such as Bitcoin and Ethereum make the coins‘ risky nature clear to retail investors is a “key priority”.
The ASA told the Standard it now plans to intensify “proactive monitoring and enforcement” of crypto advertising. The watchdog is to scope out additional guidance for companies in the coming weeks, and is “considering whether further action is needed” around social media influencers promoting investments in the space without disclosing enough about the risks.
Increasing numbers of retail investors, many with new lockdown savings, are piling into cryptocurrencies in the hope of making large returns at a time when savings account interest rates are at an all-time low.
Digital currencies are not regulated by the Financial Conduct Authority and their value is highly volatile. The FCA has repeatedly warned investors that they should be “prepared to lose all their money” when investing in crypto.
It comes after the ASA told crypto app and exchange service Luno to halt advertisements posted on the side of London buses and on Tube platforms bearing the words “If you’re seeing bitcoin on the Underground, it’s time to buy”, next to a Bitcoin logo.
At the time the watchdog said the simplicity of the statement “gave the impression that Bitcoin investment was straightforward and accessible”. The ASA told Luno it should have included risk warnings that both the app and Bitcoin have no consumer financial protections.
Luno said it was “committed to keeping customers and potential customers as informed as possible about the cryptocurrency landscape” and that it would “ensure that future Luno adverts feature an appropriate warning as to the risks of cryptocurrency”.
An ASA spokesperson said: “Cryptocurrency advertising is a key priority for us. We recognise the importance of the role we play currently in regulating ads to ensure they don’t mislead consumers about the risks of this product and are not irresponsible in how they promote them.
“Crypto has exploded in recent years but there is a real danger that people may be drawn in to invest life savings that they later lose based on poor understanding.
“As such, we are planning to carry out proactive monitoring and enforcement of crypto advertising and will also scope out additional guidance in the coming weeks. We are also considering whether further action is needed in addition to current ongoing investigations of social influencers promoting cryptocurrency.”
The watchdog also said it is “already taking action” where it can to disrupt online scam ads for crypto – a separate issue from ensuring legitimate crypto investment ads bear clear warnings of investment risk.
It is working in partnership with social media platforms including Facebook and Google to target bogus advertising “specifically online paid-for ads linking to fraudulent content, particularly crypto investment”.