Another crypto ad banned in advertising clampdown
The first ad, seen on 1 September 2021 in the Daily Mail app, included text which stated “Buy Bitcoin with credit card instantly.”
The second ad, seen on 30 July 2021 in the Love Balls app, included text which stated “Earn up to 3.5% p.a”. The number in the text increased to “8.5%”.
The ASA challenged whether both ads were misleading because they failed to illustrate the risk of the investment, and whether the ads were irresponsible and took advantage of consumers’ inexperience or credulity.
The advertising watchdog also challenged whether the first ad was misleading because it failed to make clear limitations to purchasing cryptocurrency with a credit card.
It also said the claims that consumers could earn “up to 8.5%” in the second ad were misleading as the claims could not be substantiated.
Forisgfs UK Ltd, which owns t/a Crypto.com, said that the ads had been removed voluntarily on first learning of the ASA’s concerns. The company said it had changed its marketing policy to comply with Financial Conduct Authority (FCA) rules.
The firm said the first ad advertised the speed with which users could buy cryptocurrency on their platform and claimed “it was not an ad for cryptocurrencies as such”.
Crypto.com also said the second ad referred to an offer for existing cryptocurrency users that allowed them to generate yield on their cryptocurrency holdings and “2therefore it did not advertise cryptocurrency itself”. The firm claimed that existing customers would be aware that investing in cryptocurrency came with risk.
Crypto.com said that ads limited by space could present qualifications “one-click” away as long as the headline claim was not materially misleading. It explained both ads directed users to the Crypto.com app which included appropriate investment warnings.
However, the ASA said that the advertising code required that marketing communications for investments made clear that the value of investments was variable and, unless guaranteed, could go down as well as up.
The ASA also noted Crypto.com’s response that the second ad was directed at existing cryptocurrency users who already had knowledge of the risks of cryptocurrency. However, it pointed out that the ads were shown in apps which it considered were likely to have a general audience who were unlikely to have any specialist knowledge of investing in cryptocurrency.
The watchdog said it “considered such an audience would expect cryptocurrency investments to be regulated, with legal protection in place for investment activities”.
It concluded that because neither the ads, nor the landing pages from them, included any risk warning making consumers aware that cryptocurrency could go down as well as up, or that the cryptocurrency was unregulated in the UK, the ads were misleading.
The ASA ruled that the ads must not appear again in the form complained about. It told Forisgfs UK Ltd to ensure its future ads 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.
It also told the firm to ensure that its future marketing communications “did not irresponsibly take advantage of consumers’ lack of experience or credulity by irresponsibly encouraging investing in cryptocurrency using a credit card”.