The notice orders the companies to review their ads so that they comply with the advertising rules to ensure that consumers are treated fairly.

A cryptocurrency is a digital currency which uses encryption techniques to regulate how many units of currency are available and are subject to frequent change in value.

Because most people don’t fully understand how cryptocurrencies work, how volatile they can be, or how they are not regulated, there is a real risk that people may lose money.

The ASA enforcement notice provides guidance to the crypto industry on how to stick to the rules and warns that the watchdog will monitor for compliance and implement sanctions if it doesn’t see improvements.

The notice applies to ads for cryptocurrencies, crypto exchanges and ads or promotions which otherwise involve the transfer, sale, or supply of cryptocurrencies in the UK.

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The guidance requires that advertisers clearly state that cryptocurrencies are unregulated in the UK and that the value of investments are variable and can go down.

Ads must not state or imply that investment decisions are trivial, simple, easy or suitable for anyone, and also must not imply a sense of urgency to buy or create a fear of missing out.

The ASA described the enforcement notice as a ‘red alert’ priority issue. It has recently banned several crypto ads for misleading consumers and for being socially irresponsible.

The advertising watchdog is also working closely alongside the Financial Conduct Authority (FCA) to take action against firms who appear unable or unwilling to abide by the rules.

Guy Parker, ASA chief executive, said: “Crypto has exploded in popularity in recent years. We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks. Working alongside the FCA, we’ll take strong action against any advertiser who fails to ensure that their ads are responsible.”

Myron Jobson, senior personal finance analyst at Interactive Investor, said: “Adverts promoting cryptocurrency have become increasingly difficult to miss, often cropping up on social media platforms and even on public transport. The worry is, at a time when many are seeking to shore up their finances amid the cost-of-living squeeze, people will be duped by misleading adverts to put money in these high-risk products which are simply not right for them.

“Cryptocurrencies are highly complex, volatile and, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.”

Interactive Investor research found that 45% of young adults aged between 18 and 29 are getting their first taste of investing through high-risk cryptocurrency – and an alarming number are funding this using credit cards, student loans, and other loans.

Jobson added: “Hopefully the ASA’s actions will help curb dubious and outright misleading adverts on cryptos. Adverts promoting cryptoassets with lofty promises to investors are coming under intense scrutiny. At the start of the year, the government set out a plan to legislate to address misleading cryptoassets promotions and bring them into line with other financial advertising. Greater regulation on the advertising of cryptos can’t come soon enough.”