Crypto Ads: U.K. Escalates’ Red Alert’ and Warns Firms That Break Rules Could Be Shut Down

Crypto Ads: U.K. Escalates' Red Alert' and Warns Firms That Break Rules Could Be Shut Down
Photo by Jose Francisco Fernandez Saura:

The U.K. has increased its “red alert” on cryptocurrency ads and ordered 50 companies to examine their commercials or face sanctions. In addition, the Advertising Standards Authority has issued a new enforcement notice warning crypto businesses that they could face fines or even be banned from trading. However, this measure only enforces illegal transactions, while with bitvestment you are complacent because it is already used in different countries.

Exchanges must “clearly declare that cryptocurrencies in the U.K. are not regulated” and that investments can be either up or down. In addition, advertisers are prohibited from trivializing investment decisions, such as describing them as simple, easy, or suitable for everyone. It could hinder trading platforms that claim they are easier than their rivals.

Crypto Ads 

Many crypto companies point to the past performance of digital assets such as Bitcoin. Adverts “mustn’t imply an urgency to buy or create fear of missing out,” they say. The ASA described these ads as a “red alarm” priority issue, with many promotions being banned for misleading customers or being “socially irresponsible.”

There is a risk of people losing money because most people don’t understand cryptocurrency and how volatile it can become. “The ASA is also concerned by advertisements that encourage investors to invest in Bitcoin and trading platforms that permit digital assets to be bought using a credit card.

The ASA warned that it would be closely monitoring cryptocurrency ads starting now. It will report any violation of its enforcement notice after May 2 to the Financial Conduct Authority. In recent years, cryptography has seen a surge in popularity. We are concerned that ads might tempt people into investing money they cannot afford to lose without fully understanding the risks. We will work with the FCA to take strong action against advertisers who fail to make sure their ads are responsible. “

The crypto market is causing governments around the globe to struggle to keep up. For example, although the U.K. plans to strengthen its rules regarding ads with the FCA responsible for regulation, the new measures won’t be in force until next year. According to the FCA, 2.3 million Britons own cryptocurrency. However, investors are more likely to regret their purchase if triggered via an advertisement.

On Tuesday, the U.K.’s advertising watchdog sent 50 crypto companies a “red alert,” warning them that it might need to take action against misleading advertisements.

The Advertising Standards Authority sent the enforcement note to firms such as Coinbase and eToro. Luno. CoinDesk reports advising them to review their ads to comply with the new guidance.

“This is a red alert priority issue and we’ve recently blocked several crypto ads for misleading customers and being socially irresponsible,” ASA stated in a statement. The watchdog requires crypto advertisers to state that cryptocurrencies are not regulated in the U.K. As a result, the value of investments is “variable,” which may lead to a drop. Also, crypto ads cannot imply an urgency or imply that crypto investments have “low risk” or are suitable for everyone. They also can’t create FOMO (fear of missing out).

In December, the watchdog banned seven cryptocurrency advertisements from Papa John’s and Coinbase. It accused them of “irresponsibly exploiting consumers’ inexperience and failing to illustrate the risk of the investment” and even stopped Arsenal’s fan token promotions. In addition, they claimed that they “trivialized investment in crypto-assets.”

The ASA also banned two Crypto advertisements for misleading consumers with “irresponsible ads.” The regulator is taking further steps to involve financial authorities.

After being granted additional powers in January, the FCA has increased its supervision of crypto advertising. After research showed that consumers were unaware of the risks associated with crypto assets, the financial watchdog now considers them “restricted mass-market investments.”

Final Words

Too many people are being influenced to invest in products that they don’t fully understand or are too risky. Clear, fair, and accurate information is essential for people to make informed decisions. This is the central goal of our consumer investment strategy, FCA’s executive director for market stated in a statement announcing increased oversight. The FCA took one of its first enforcement actions with its new power on March 11. It stopped the operation of crypto ATMs within the country.