The Council of the Advertising Standards Authority (the ASA Council) has clamped down on Crypto.com (a payment and cryptocurrency trading platform) in a recent ruling upholding a challenge to two advertisements which were held to be misleading because they failed to illustrate the risk of investment into cryptocurrency. The first ad stated “Buy Bitcoin with credit card instantly” (“Ad 1”), whilst the second ad stated “Earn up to 8.5% p.a” (Ad 2) (together, the Ads).
It was argued by Crypto.com that neither of the Ads advertised cryptocurrency itself: Ad 1 allegedly advertised the speed with which users could buy cryptocurrency, whilst Ad 2 allegedly related to an offer for existing cryptocurrency users who would supposedly be aware of the risks associated with investing in cryptocurrency. However, on the basis that cryptocurrency is unregulated, and the ASA Council considered that the Ads’ audience in fact comprised people who would (mistakenly) expect the contrary, the ASA Council concluded that – because neither Ads included any risk warning making consumers aware of this, the Ads were misleading and in breach of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
As this ruling makes clear, the ASA is clamping down on advertisements by payment and cryptocurrency trading platforms, such as Crypto.com, to protect consumers from the unregulated world of cryptocurrency. This is a trend that we have seen developing since December 2021 (see the ASA’s rulings against Skrill Ltd, CoinBurp Ltd and Exmo Exchange Ltd), and which follows the Financial Conduct Authority's consumer warning (issued in November 2021) of the risks of investments advertising high returns based on cryptoassets. The ASA’s actions have no doubt been (and no doubt will continue to be) a welcome safeguard for consumers dabbling in the unregulated world of cryptocurrency.