The Advertising Standards Authority has contacted over 50 crypto businesses with guidance on how to market their services. The enforcement notice calls on firms to comply with its rules by 2 May 2022, and provides a handy guide for crypto firms looking to avoid sanction for their advertising.
The notice is relevant to adverts relating to the transfer, sale or supply of cryptoassets which are targeted at UK consumers or promoted by UK advertisers. Crypto firms should consider the broad scope of the notice which captures not only paid-for ads in traditional or digital media but also non-paid for advertising such as websites, email marketing or any social media presence.
According to the ASA, these adverts must clearly state that:
- cryptocurrencies are unregulated in the UK
- profits may be subject to capital gains tax
- the value of investments can go down as well as up
The guidance encourages advertisers to take care when designing their campaigns not to imply, for example, that investments are low risk or suitable for anyone. The ASA says that it will look at the overall impression of an advert i.e. including qualifications may not be enough to make the promotion compliant.
The latest intervention reiterates previous ASA advice on promoting cryptoassets. Its guidance is effectively a bridge to the Financial Conduct Authority taking over responsibility for regulating crypto adverts, with the ASA saying it has worked with the FCA on this. In January, the Government confirmed it would bring cryptoassets within the financial promotions regime which is policed by the FCA. This regime prohibits unauthorised firms from making financial promotions unless they are exempt or approved by a firm with a UK licence. In practice, given that many are unregulated, this will severely restrict the ability of crypto businesses in the UK to promote their services.
Ads for cryptocurrencies have been ruled misleading and socially irresponsible... and also in breach of rules which apply to ads for financial products.