UK watchdog puts 50 crypto companies on notice over ‘misleading’ ads

A bitcoin ATM inside a shop in Finsbury Park, London, on Feb. 4, 2022.
Luke MacGregor | Bloomberg | Getty Images

LONDON — Over 50 cryptocurrency companies have been sent enforcement notices by the U.K.’s advertising watchdog as part of a regulatory crackdown on promotions in the industry.

The Advertising Standards Authority said Tuesday it has told the firms to review their ads and make sure they are in compliance with the rules. It also threatened firms with targeted sanctions if “problem ads” persist after May 2.

This would include reporting non-compliant advertisers to another regulator, the Financial Conduct Authority.

In its notice to the companies, the regulator gave guidance stating advertisers must make clear digital assets are unregulated in the U.K. Firms must not urge people to buy bitcoin or another cryptocurrency in their ads, or create the “fear of missing out” on an investment, the ASA added.

The ASA didn’t name the companies it has contacted, but said it has previously banned ads from the likes of crypto platform Coinbase and pizza chain Papa John’s over concerns they misled consumers.

“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible,” the ASA said in a statement Tuesday.

It comes as Britain takes a tougher line on the crypto industry. The government in January said it would bring crypto ads under the same rules for financial promotions, a move that would require advertisers in the industry to be authorized by regulators.

Regulators have also proposed limiting crypto ads in such a way that consumers may only respond to them if they qualify as high-net-worth individuals or sophisticated investors, a move that has been criticized by industry representatives.

A consultation from the Financial Conduct Authority with the industry on regulation of crypto ads is set to expire on Wednesday.

Global Digital Finance, an industry body that includes crypto exchanges Coinbase and Bitfinex, said it has sent a letter to U.K. Finance Minister Rishi Sunak expressing some concerns.

“Rather than attempting to broaden the scope of existing legislation, stifling the market and attracting unintended consequences, a new bespoke regime should be implemented,” Lavan Thasarathakumar, Global Digital Finance’s director of government and regulatory affairs, said in the letter.

“This regime would include obligations for how cryptoasset promotions should be communicated and more generally would provide clarity on how cryptoasset firms should conduct themselves and how regulators should supervise them.”

Separately, a deadline for crypto firms to be registered with the FCA is set to elapse on Mar. 13. A number of companies, including Revolut and Copper, face the prospect of having to wind down their crypto operations in the U.K. if their application is not approved in time.

Products You May Like

Articles You May Like

Fed’s James Bullard expresses confidence that the economy can achieve a ‘soft landing’
Equifax coding error caused millions of inaccurate credit scores. How to know if you are affected
The confusing job market: Tech and finance brace for the worst, retail is mixed, travel can’t hire fast enough
EV maker Lucid again cuts production targets as logistics challenges cripple output
Would you be included in student loan forgiveness? What we know so far

Leave a Reply

Your email address will not be published.