The United Kingdom’s Advertising Standards Authority, or ASA, has ruled to place an official ban on two mobile application advertisements from popular trading platform Crypto.com which promoted the ease of purchasing cryptocurrencies such as Bitcoin, as well as earning yield rewards on digital assets.
Gaining notoriety within the industry for their strict legislation on the proposed implications of a cryptocurrency advert, the ASA flagged the marketing material for breach a number of financial watchdog rules, including not effectively stating the risk potential of the investment, abusing consumer’s lack of market understanding, as well as not specifying the limitations of purchasing crypto with credit cards.
Crypto.com removed the advert voluntarily once the concern was raised, but debated the nuances of the advertisements with the regulator, stating that the intention of the inaugural advert — published on the Love Ball app on July 30 2021 — w that users could “earn up to 8.5% p.a”, was insinuating through yield investments, not specific crypto assets.
Likewise, according to Crypto.com’s written response, the subsequent advert, published on the Daily Mail newspaper app on Sept 1, was intending to showcase the speedy process of purchasing crypto assets on their platform — “Buy Bitcoin with credit card instantly” — as opposed to directly advising consumers to engage in trading activities.
Crypto.com’s marketing forays in the United States has propelled their brand recognition to a mainstream audience. The Matt Damon TV commercial, the purchase of a twenty-year lease $700 million for the naming rights for the historic Staples Center now known as the Crypto.com Arena, as well as the launch nonfungible tokens, or NFTs in partnership with the UFC, have all expanded the platform’s ambitions.
Concluding their assessment, the ASA advised Crypto.com that future marketing material of such kind must be made “sufficiently clear that the value of investments in cryptocurrency was variable and could go down as well as up and that cryptocurrency was unregulated.”
Alongside this, that the material does not “irresponsibly take advantage of consumers’ lack of experience or credulity by irresponsibly encouraging investing in cryptocurrency using a credit card”, as well as that “using a credit card could be subject to higher interest rates, extra fees and that some credit card issuers prohibit the buying of cryptocurrency.”
In the month of December 2021, the ASA flagged a number of crypto-related firms for violating advertising rules in their marketing campaigns.
On Dec 15, the ASA flagged marketing campaigns from Coinbase, Kraken and eToro, among others for misleading investment material, while on Dec 22, accused Arsenal FC and blockchain firm Chiliz of “taking advantage of consumers inexperience in crypto assets” in the issuance and subsequent promotion of the club’s fan token, $AFC.
Earlier that month, Members of Parliament, or MPs, at the treasury select committee implored the nation’s overarching financial body, the FCA, that investments within the cryptocurrency market should not be compared to traditional investments, and that they could be utilized by criminals seeking to launder money.