Misleading crypto ad banned
A newspaper advert for Coinfloor Ltd, a Bitcoin and cryptocurrency exchange, has been banned by the Advertising Standards Authority (ASA) for ‘irresponsibly’ promoting crypto investments.
The full-page advert appeared in the Northamptonshire Telegraph on 3 December 2020. It included a photograph of a Coinfloor customer with a personal testimony about how she had invested part of her pension into Bitcoin via the platform.
She is quoted as saying: “Today there is no point keeping it in the bank – the interest rates are insulting.
“That is why when I received my pension, I put a third of it into gold, a third of it into silver and the remainder into Bitcoin… To me, Bitcoin is digital gold and it has allowed me to take the steps to secure the cash I already have.”
Small print at the bottom of the ad stated “Investing in cryptocurrencies involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose”.
A complaint about the ad claimed it was ‘misleading’ and ‘socially irresponsible’.
The complaint was upheld by the ASA which concluded it was misleading because it had failed to make clear the risks associated with Bitcoin investments, and that it directly compared investing savings in Bitcoin with the use of regulated services, discouraging consumers from placing their money in banks.
The regulator said the ad was socially irresponsible because it had suggested that purchasing Bitcoin was a good or secure way to invest one’s savings or pension. The ASA said the advert must not appear again in the same form.
Coinfloor Ltd said that all views expressed in the ad were from the perspective of the Coinfloor customer who was featured, and her view did not represent Coinfloor’s view.
It said that the customer’s comments were displayed separately in a white box, in italicised text and within quotation marks, and included statements such as “to me”.
It also pointed to a disclaimer stating that cryptocurrencies involved significant risk and could result in the loss of invested capital. It claimed this disclaimer was ‘sufficiently prominent’.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The spotlight has been shone once again on companies which offer crypto-assets with lofty promises to investors, underlining the risks that these types of investment can pose to consumers.
“There is clearly a growing concern at the heart of regulatory bodies about the increased speculation surrounding crypto currencies. The ASA judgement comes after a warning from the Financial Conduct Authority in January that consumers risk losing all their money if they succumb to promises of fast and high returns made by firms offering investments in or linked to cryptoassets.”