Companies putting out crypto currency adverts have been censured by the Advertising Standards Agency for failing to highlight the risks.
The ASA has ruled against several different crypto currency trading platforms and promotional services, banning several adverts, YouTube videos, web pages and even Twitter biography sections after receiving complaints from members of the public.
Coinburp, Coinbase Europe Ltd (trading as Coinbase), Exmo Exchange Ltd, Luno Money Ltd (trading as Luno), Papa John's (GB) Ltd (trading as Papa John's Pizza, Papa Johns), Payward (trading as Kraken) and trading app eToro (UK) Ltd were all censured by the ASA.
The main complaint was that the various adverts were irresponsible and did not convey the risks of cryptocurrency trading.
For example, Pizza giant Papa Johns was served a slice of ASA censorship after the watchdog found that its Twitter promotions back in May, which included wording such as: 'TURN PIZZA INTO £10 WORTH OF BITCOIN' was "irresponsible".
In this instance, the appropriate risk warning did not appear.eToroThe ASA said: "Papa John’s GB Ltd said they had a long running association with cryptocurrency, which dated back to May 2010 when it was believed that Bitcoin had been first used to buy two Papa John’s pizzas.
"Papa John’s said that the ads made no comment on investing in Bitcoin and the promotion only offered a mechanism for customers to get free Bitcoin."
But the watchdog said: "We considered the use of pizza to promote a cryptocurrency account encouraged consumers to engage in such a high-risk investment without consideration.
"It trivialised what was a serious and potentially costly financial decision, especially in the context of the intended audience who were likely to have limited knowledge of cryptocurrency.
"Therefore because the ads took advantage of consumers’ inexperience or credulity and trivialised investment in cryptocurrency, we concluded they were irresponsible and breached the Code."
Examples of censorship
Also in its latest update, the advertising watchdog said it had banned a Twitter bio for cryptocurrency trading platform Coinburp, for "irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment".
The Twitter page for Coinburp, seen on 26 July 2021, included a bio section which stated “Register in minutes, deposit instantly, then make super-easy and secure crypto trades”.
The ASA contended the biog was irresponsible because it took advantage of consumers’ inexperience or credulity and misleading because it failed to illustrate the risk of the investment.
Coinburp said: "The bio was not intended to be a comprehensive risk warning but a general introduction to their service and it included no comment or promise about returns on any investment.
"Coinburp believed an average user would understand that investments had tax implications and they did not believe that the lack of specific wording in that regard amounted to taking advantage of consumers."
However, the ASA's ruling stated: "While the website did contain qualification warning about the risks of cryptocurrency, it made no mention of the potential need to pay CGT on cryptocurrency gains.
"We considered the ad took advantage of consumers’ inexperience and credulity by not making clear tax could be paid on cryptocurrency profits, and by irresponsibly suggesting that investing in cryptocurrency was straightforward and for everyone, regardless of their personal circumstances and understanding of what they were investing in."
eToro to review its paid-for adverts
Similarly, a display ad for stocks and cryptocurrency trading platform eToro was banned for irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.
The ASA said an August online advert for eToro was misleading and irresponsible. eToro said while the product was unregulated, it had aimed to include a prominent risk warning to highlight the lack of regulation of cryptocurrency and the perceived level of risk associated with cryptocurrency assets.
The platform acknowledged that in this instance the appropriate risk warning was missing, owing to a lapse in their review process.
The company said it "acknowledged there had been a breakdown in our review process which meant, in this instance, the appropriate risk warning did not appear."
Accordingly, eToro has contacted the relevant marketing team to remove the ad and ensure it was no longer running.
It has also reiterated to the relevant teams the need for a consistent and ongoing approach to financial promotions, and told the ASA that eToro would also be conducting a full audit of their paid-for ads, making any necessary changes and removing any non-compliant ads.
simoney.kyriakou@ft.com
