The Advertising Standards Authority of the United Kingdom has increased its scrutiny of cryptocurrency advertisements and has ordered more than 50 companies in the crypto industry to adequately inform their customers that digital assets are unregulated and volatile.
During the Covid-19 pandemic, cryptocurrency has seen a surge in popularity among a range of users and investors, with both retail and institutional investors, were seen keen to make investments in the asset class. However, in the United Kingdom, bitcoin and other digital tokens are largely uncontrolled by the regulatory authorities and hence liable to volatility.
In the United Kingdom, advertisements for digital assets, ranging from cryptocurrency to non-fungible tokens, have become prevalent on public transportation as well as during popular sporting events.
Advertisements put up by crypto companies must not express or imply that investing in cryptocurrency is “trivial, straightforward, easy, or suited for anyone,” according to the directive of the ASA.
Such advertisements must also avoid instilling a “fear of losing out” or implying that investments are “low risk,” according to the UK watchdog.
The ASA stated that its standards apply to all advertisements for crypto tokens such as bitcoin, as well as crypto exchanges where traders can buy and sell tokens, and other relevant promotions that are targeted at British consumers.
“We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks,” Advertising Standards Authority Chief Executive Guy Parker said in a statement.
After May 2, the watchdog will closely monitor all crypto advertisements and take enforcement action against ads that violate its regulations, according to the regulatory authority.
This decision of the regulator comes as the UK’s financial authority considers restricting the promotion of cryptoassets in the wake of a surge in advertising and celebrity endorsements.
Other European governments have also tightened restrictions on cryptocurrency advertising. In Spain, for example, such advertisements will require approval from the stock market supervisor, according to the Spanish government’s announcement in January.
(Adapted from EuroNews.com)