Three leading cryptocurrency exchanges misled UK clients with digital advertisements, the Advertising Standards Authority (ASA) said today.
The ASA is the UK advertising regulator, with the responsibility of ensuring UK ads are legal, decent, honest and truthful.
The ASA cannot impose sanctions, but if a marketer fails to comply with its rules it can refer cases to the UK’s Competition and Markets Authority, which has the power to initiate criminal prosecutions.
In one ruling, the ASA said cryptocurrency exchange Coinbase’s European arm had placed an ad on Facebook in July which was irresponsible and failed to illustrate the risk of investing in cryptocurrency.
Coinbase’s ad had included text which stated “£5 in #Bitcoin in 2010 would be worth over £100,000 in January 2021. Don’t miss out on the next decade – get started on Coinbase today”, the ASA said.
The Coinbase ad also included a list of bullet points which stated “Simple and easy to use”, “Never been hacked” and “Trusted”, the ASA said.
“Because the ad did not include any risk warning making consumers aware that cryptocurrency could go down as well as up, or that the cryptocurrency was unregulated in the UK we concluded that the ad was misleading,” the ASA said.
Kraken’s one-second risk warning presented the consumer with a large amount of information that would not be fully read or understood, if it was seen at all
In a second ruling, the ASA said an ad placed at London Bridge station by cryptocurrency exchange Kraken had been misleading and irresponsible.
The ad, said the ASA, had started with a one second risk warning, stating that “Cryptocurrency can be a highly volatile asset class. Please seek advice from an independent and suitable licensed financial advisor before purchasing …The services provided by Kraken are unregulated activities in the United Kingdom. In particular, the Financial Ombudsman Service or the Financial Services Compensation Scheme do not apply to the activities carried on by Kraken and you will have no recourse to these services in the event of a complaint”.
The ad then ran for 19 seconds and included text which stated “Kraken” and “Buy Bitcoin & Crypto”. Subsequent slides included text which stated “Buy 50+ crypto in minutes Get started with as little as £10”, “Build digital wealth and buy crypto on-the-go” and “Check real-time prices”, the ASA said.
The ASA said that Kraken’s one-second risk warning presented the consumer with a large amount of information that would not be fully read or understood, if it was seen at all.
Kraken’s ad also failed to include a clear risk warning for consumers, making them aware that cryptocurrency could go down as well as up, the ASA said.
In a third ruling, the ASA said that cryptocurrency trading platform eToro had run an ad on Yahoo Finance in August that was irresponsible and misleading.
eToro’s ad, said the ASA, had taken advantage of consumers’ inexperience or credulity by suggesting that investing in cryptocurrency was simple and suitable for anyone, regardless of personal financial circumstances.
eToro’s ad had also failed include a risk warning making consumers aware that cryptocurrency could go down as well as up, the ASA said.
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