The British advertising regulator, the Advertising Standards Authority (ASA), has been actively cracking down on non-compliant crypto ads, recently targeting Coinbase and eToro (UK).
According to the ASA’s announcement on Wednesday, both the companies ran paid ads on online platforms to promote their cryptocurrency services. However, those ads were labeled as ‘irresponsible’ and ‘misleading’.
Coinbase’s ad appeared on Facebook on July 27, 2021, that included the test: “£5 in #Bitcoin in 2010 would be worth over £100,000 in January 2021. Don’t miss out on the next decade, get started on Coinbase today.” It even noted some advantages of Coinbase and labeled its competitors as ‘unregulated’.
However, eToro’s ad was seen on the Yahoo Finance website on August 27, 2021, which primarily promoted the platform’s ready-made crypto investment portfolio.
In both cases, the regulator called the ads 'irresponsible’ and ‘misleading’ for taking ‘advantage of consumers’ inexperience or credulity’ and ‘to illustrate the risk of the investment’.
Coinbase was additionally held for claiming its competitors ‘unregulated’ and for past reference of Bitcoin price.
Though eToro admitted to the lapse for the missing risk warning, Coinbase defended itself against all the regulatory claims.
Both the companies are now directed to not run the ads in the previous form and ordered them to clarify the risks and unregulated nature of cryptocurrencies in the United Kingdom.
Harsh?
“eToro believes there is a fundamental flaw in the ASA's ruling and is seeking an Independent Review,” an eToro spokesperson told Finance Magnates. “There is an urgent need for the ASA to consult with the FCA and industry more widely before it embarks on a course of requiring advertisers of financial products to include warnings about potential tax implications in their advertising.”
“eToro is in a uniquely disadvantaged position, as the Ruling is directed only at eToro, and it will have to attempt to comply with it, despite real practical difficulties, while other participants in the cryptoasset market, and the financial services industry more widely, will not.”
The UK agency already flagged other crypto advertisements in the country and included 'red alert’ priority on crypto advertising.
