Is ASA’s advertising ban on crypto exchanges too harsh?

Highlights 

• The UK’s advertising watchdog ASA reprimanded seven firms for breaching the UK ad laws for their various online as well as offline endorsement campaigns.
• British MPs recently called upon the FCA to ensure regulation on the words such as ‘invest’ ‘investment’ when it comes to promotional campaigns. 
• The firms which faced the ire includes Coinbase, Kraken, eToro, Papa John’s GB, Coinburp, Luno Money etc.

The Advertising Standards Authority (ASA), UK’s independent advertising regulator, has struck the gavel on the leading cryptocurrency exchanges operating in the country. The ASA took a grim view of the flagrant disregard of the crypto advertising rules by displaying misleading and irresponsible ads.

The advertising watchdog reprimanded seven firms for breaching the UK ad laws for their various online as well as offline endorsement campaigns. The ASA stated that the ads were banned as they were sending messages that tend to either deceive or take advantage of the consumer’s inexperience in the area while making investment decisions. At the same time, ASA felt that the companies failed to illustrate the risk of the investment.

Also read: How UK is leading cryptocurrency adoption in Europe

The firms which faced the ire were Coinbase, Kraken, eToro, Papa John’s GB, Coinburp, Luno Money, Payward and Exmo Exchange. The recent move came after it made misleading crypto marketing a ‘red alert’ priority. 

What did the ads portray?

Leading exchange Coinbase was one of the casualties of the ban, as the ASA felt that the European branch of the US exchange displayed misleading Facebook promotional campaigns, which compared the Bitcoin prices of 2010 to Bitcoin prices in 2021. 

Without an appropriate risk disclaimer, Kraken’s European branch Payward posted a digital poster at the London Bridge station. The regulator argued that Payward’s ad displayed only for a second, which was too short a period for anyone to read or understand. 

Pizza joint Papa John came under fire for offering Bitcoins worth £10 cashback to customers. The regulator added that the promotional deal didn’t warn the investors of the risks of crypto assets. 

Also read: 8 top events that made headlines in cryptosphere in 2021 

Stringent actions showcase government’s crypto seriousness

The government has time and again taken measures to educate its masses about the potential risks of cryptocurrencies. However, many investors are still unaware of the basic facts, such as it is not regulated by FCA.

British MPs recently called upon the FCA to ensure regulation on the words such as ‘invest’ ‘investment’ when it comes to promotional campaigns. Even the UK Department for Education (DfE) had rejected any immediate plans to incorporate cryptocurrency as a subject in the UK school curriculum.

Prior to the latest ban, the ASA had shot down an ad campaign by the Luno Exchange in May. The Luno ad was seen across Britain with a message that if you see the Bitcoin on the underground, it would be the right time to buy. This was the period when Bitcoin prices had a significant drop following its all-time-high of US$64000.

Also read: Why is Voxies (VOXEL) crypto surging today?

Different rules for different folks?

Well, the firms could have a reason to be aggrieved with the latest ban as well. Not so long ago, the London transport system was taken by storm by the Floki Inu ads. On 29 October Floki ads, and the online branding campaign was put forward to legitimise the coin and infuse investors’ confidence. When quizzed about the legitimacy of the ads, the ASA then had suggested that Floki ad was in line with the advertising rules.

As there is no clear distinction between right and wrong as per the rules, the ban could be seen as a tough call. With MPs getting more serious about crypto regulations, we can perhaps soon see a period where it would be clearly defined as to what is permissible and what’s not to be displayed or included in crypto related ads.