Irresponsible London Underground Bitcoin advert banned
'Irresponsible' London Underground Bitcoin advert banned
A "reckless" advertisement that enticed inexperienced consumers to purchase Bitcoin has been banned.
A poster distributed by cryptocurrency exchange Luno on London's public transport stated: "If you see Bitcoin on the underground, now is the time to buy."
The Advertising Standards Authority (ASA) stated that the advertisement was deceptive and omitted critical risk warnings.
Luno stated that the advertisements would not reappear and that future advertisements would include an appropriate risk warning.
Advertising must make it clear that, unless guaranteed, the value of investments can go down as well as up, the ASA rules stipulate.
Additionally, the poster should have stated that both Luno and Bitcoin are unregulated, leaving consumers without regulatory protection.
The watchdog stated that the "it's time to buy" statement's simplicity "created the impression that Bitcoin investment was simple and accessible."
"We recognized that investing in Bitcoin was complex, volatile, and could result in investor losses," the ASA stated. "This was in stark contrast to the advertisement. The general public, to whom it was addressed, was likely to be inexperienced in their understanding of cryptocurrencies."
It concluded that the advertisement made the irresponsible claim that investing in Bitcoin through Luno was simple and straightforward.
Luno stated that it is "dedicated to keeping customers and prospective customers informed about the cryptocurrency landscape."
It stated that it would "ensure that future Luno advertisements include an appropriate warning about the risks associated with cryptocurrency," adding that the company's next advertising campaign had been approved by Transport for London.
Crpyptocurrency ads have been banned before
This is not the first time the regulator has taken action against Bitcoin merchants.
It banned a full-page regional newspaper advertisement for Coinfloor in March, advising readers that "there is no point in keeping your money in the bank" and referring to Bitcoin as "digital gold."
According to the ASA, the advertisement "irresponsibly implied that purchasing Bitcoin was a secure investment of one's savings or pension."
The ASA warned in an April note, "Marketers should not imply that cryptocurrencies are regulated by the [Financial Conduct Authority]."
It stated that if marketers want to imply that consumers can profit from cryptocurrency investments, they must also educate them about the risks.
"Because cryptocurrencies are so volatile, even including a disclaimer in an advertisement's small print may not be sufficient to comply with the CAP Code [which regulates non-broadcast advertising]."
It cautioned marketers against exploiting consumers' inexperience or credulity.
Lofty promises
"Companies that offer investors lofty promises about cryptoassets are coming under increased scrutiny, as regulators become increasingly concerned about the risks these types of investments pose to consumers," said Susannah Streeter, senior investment analyst at Hargreaves Lansdown.
"In addition to being extremely volatile, the majority of cryptocurrencies are unregulated, which adds another layer of uncertainty and leaves investors vulnerable to fraud," she noted.
Bitcoin, the most widely used cryptocurrency, has been extremely volatile in recent months.
It fell more than 10% two weeks ago after Tesla announced it would no longer accept the currency.
Since 2019, China has prohibited cryptocurrency trading in order to combat money laundering.
Chinese banks and payment firms were prohibited from providing cryptocurrency transaction services last week. Following that, the country implemented a crackdown on cryptocurrency mining.
The moves triggered a new downward spiral in prices last weekend, with Bitcoin's value more than halving from its mid-April high of over $63,000 (£44,000).
"Beijing's increasingly hardline stance appears to be the beginning of a concerted effort to constrain the decentralized power of cryptocurrencies," Ms Streeter said.
NFT warning
The ASA also issued a warning last month regarding advertisements for Non-fungible Tokens (NFTs).
NFTs are digital authentication certificates that attest to the uniqueness of a particular digital asset, such as a work of digital art.
They are connected to cryptocurrencies due to the fact that they both utilize the same blockchain technology.
Although the ASA has not yet decided any cases involving NFTs, it has warned marketers to ensure their advertisements are clear, accurate, and understandable in order to avoid misleading consumers.
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