The UK’s Advertising Standards Agency (ASA) has fired a warning to more than 50 crypto companies to bring their potentially misleading ads up to scratch or risk falling foul of tough new measures, reports Bloomberg.
On Tuesday, the watchdog announced that it had sent enforcement notices to the firms, instructing them that any TV, press, email, or online ads they produce must, going forward, adhere to three strict rules:
- They must make it clear that digital assets are unregulated in the UK.
- Firms must point out that crypto profits are subject to capital gains tax.
- Traders need to know that their crypto investments can go down as well as up.
The ASA has, so far, refused to name any of the companies contacted. However, it does have a history of going after heavy hitters.
And last year, several popular YouTubers also ended up in hot water after promoting a fake charity token which turned out to be — surprise, surprise — a pump and dump scam.
“Crypto has exploded in popularity in recent years,” ASA chief exec, Guy Parker, said in a statement.
“We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks.”
Crypto has been a “red alert” priority for the ASA since November last year. This is due to the increase in concerns surrounding crypto and NFT ads.
The notice from the ASA comes in the wake of changes to the UK’s draft Online Safety Bill.
Earlier this month, the bill changed to make search engines and social media platforms responsible for clamping down on dodgy paid-for promotions.
The ASA to team up with the FCA over offending crypto ads
The Advertising Standards Agency says it will be monitoring crypto ads produced between now and May 2. After this time it says it may resort to what it calls “targeted enforcement action.”
This could involve shopping persistent rule-breakers to the Financial Conduct Authority (FCA) or Trading Standards.
Earlier this month the FCA turned its attention to around 300 crypto start-ups after receiving thousands of complaints related to potential scams.
And on Wednesday, it is set to complete its consultation period concerning the regulation of crypto ads.
In the ASA’s statement, Sarah Pritchard, the agency’s executive director of markets, said:
“We will continue to work closely with the ASA to tackle unclear or misleading crypto advertising. Those who invest in crypto assets should be prepared to lose all their money.”
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