We have issued an Enforcement Notice to over 50 companies which advertise cryptocurrencies, instructing them to review their ads and to ensure they understand and are complying with the rules so that consumers are treated fairly.
The Enforcement Notice provides guidance to the crypto industry on how to stick to the rules and warns that we will monitor for compliance and implement sanctions if we do not see improvements. The guidance requires that advertisers:
- should clearly state that cryptocurrencies are unregulated in the UK and that the value of investments are variable and can go down
- must not state or imply that investment decisions are trivial, simple, easy or suitable for anyone
- must not imply a sense of urgency to buy or create a fear of missing out, or that investments are ‘low risk’
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.
This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible.
The notice continues our work in clamping down on problem crypto ads. As part of this, we are working closely alongside the Financial Conduct Authority (FCA) to take action against those who appear unable or unwilling to abide by the rules.
The notice applies to ads for cryptocurrencies, crypto exchanges and ads or promotions which otherwise involve the transfer, sale or supply of cryptocurrencies, targeted at UK consumers or that are targeted globally on behalf of UK-based advertisers.
The ASA’s Compliance team will conduct follow-up monitoring and if problem ads persist after 2 May, we will take targeted enforcement action to ensure a level playing field. This will include non-compliant advertisers being reported to the FCA, who have worked closely alongside us in helping to distribute the Enforcement Notice.
Advertising Standards Authority Chief Executive, Guy Parker, 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.”
Executive Director of Markets at the FCA, Sarah Pritchard, said:
“We will continue to work closely with the ASA to tackle unclear or misleading crypto advertising. People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website. Crypto assets remain unregulated and those who invest in them should be prepared to lose all their money.”