Pizza chain Papa John’s has been slammed by the UK’s advertising watchdog for trivializing crypto investing after it offered free Bitcoin to anyone spending £30 ($39.60) or more.
Launched in May, the promotion was a partnership between Papa John’s and London-headquartered crypto firm Luno. It was designed to be a tie-in with Bitcoin Pizza Day (May 22).
As reported by the UK-based Indy100, the offer was shared via Twitter and the Papa John’s website. It gave a promo code to customers who spent £30 or more.
This unlocked £10 ($13.20) when they opened a Luno account, where they could trade crypto. It also offered pizza fans the chance to win one whole Bitcoin, then worth around £40,000 ($52,900).
But the UK’s Advertising Standards Authority (ASA) said the offer didn’t acknowledge the complexities associated with crypto investing. Nor did it include any kind of warning about potential risks.
It has now banned the advertisements “in the form complained about.”
In its judgment, the ASA said that the majority of people likely to engage with the ads would be a general audience “likely to be inexperienced in their understanding of cryptocurrencies.”
“We considered the use of pizza to promote a cryptocurrency account encouraged consumers to engage in such a high-risk investment without consideration and trivialized what was a serious and potentially costly financial decision,” said the ASA (our emphasis).
The ASA also pointed out that crypto is not currently subject to protections from the Financial Services Compensation Scheme, or regulated by financial authorities.
May 22 is a sacred day for Papa John’s
Papa John’s invoked the spirit of May 22 — Bitcoin Pizza Day — in its attempts to defend the promotion. This is the day on which crypto fans mark the first ever “real-world” Bitcoin transaction.
The deal saw early adopter Laszlo Hanyecz pay someone 10,000 BTC to order them two Papa John’s pizzas, worth the price of two pizzas back then but nearly $485 million today.
In its defense, the chain said it was aware that some customers would be more familiar with crypto than others.
Papa John’s believes that, due to its “historic connection with Bitcoin,” the Luno partnership was nothing unusual.
“The promotion only reflected the specific interest in pizza and Bitcoin, at that time of year, and offered free Bitcoin as part of that,” said Papa John’s.
Papa John’s reportedly claimed that voucher recipients were under “no obligation to trade or make a transaction” to receive the free crypto.
They could even sell the Bitcoin and close their accounts, the Louisville-headquartered pizza giant said.
Papa John’s added that the promotions “made no comment on investing in Bitcoin.” Instead, it was more akin to a discount or cashback offer.
Papa John’s claims it has removed all of the ads. However, at time of writing the promotional tweets are still visible.
ASA says crypto marketing is top priority
Back in July, the ASA called crypto marketing a “red alert priority.”
Alongside the Papa John’s ban, the ASA shut down promotions for Coinburp, eToro, Payward, Exmo Exchange, Luno Money, and Coinbase Europe.
According to a BBC report, these bans are part of a bigger initiative. It will include updated guidance for crypto advertising.
Speaking to the BBC, the ASA said:
“Consumers need to know about the risks of investing in crypto assets and companies should make sure that their ads aren’t misleading or socially irresponsible by taking advantage of consumers’ lack of awareness around these complex and volatile products.”
The ASA said it will now focus on ads for NFTs and fan tokens.
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