UK Watchdog Teaches Coinbase, Kraken, and Others How to Advertise Crypto
The UK's Advertising Standards Authority (ASA) has decided to ban seven crypto-related advertisements. The latest batch of bans illustrates that, in their online communications, businesses must take great care to fashion their crypto-related messages in a maximally neutral way and avoid drawing the regulator’s ire.
Among others, a paid-for Facebook ad for major crypto exchange Coinbase was banned for what the ASA calls “irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.” The company defended itself by stating it had no intent to imply that crypto was straightforward and the claim “Simple and easy to use” referred specifically to its app. Despite this, the watchdog upheld its decision.
A digital poster for crypto exchange Kraken seen in August 2021 at London Bridge station was also banned, with the ASA accusing the firm of “irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.” Kraken defended itself by using UK Financial Conduct Authority (FCA) research into consumer opinions on cryptoassets, demonstrating that 96% of investors who knew of cryptocurrencies but had never bought them also knew that the asset class was not regulated.
Despite this argument, the ASA was not convinced, as it considered Kraken suggested “investing in cryptocurrency was simple and suitable for anyone regardless of personal financial circumstances or understanding of the product” and in breach of its code.
A post on the website of pizza chain Papa John’s and a related Twitter post that promoted crypto were banned for what the regulator considered as “irresponsibly taking advantage of consumers’ lack of experience and for trivializing investment in cryptocurrency.” The chain teamed up with London-based crypto platform Luno to offer its customers small amounts of bitcoin (BTC) when ordering pizzas. Papa John’s replied that its ads made no comment on investing in crypto and the promotion only allowed customers to receive free bitcoin. The ASA upheld its decision anyway.
A Twitter post by crypto trading platform CoinBurp was banned for what the watchdog calls irresponsibly taking advantage of consumers’ inexperience and credulity, as well as failing to inform them on the risk of the proposed investment. CoinBurp said it did not intend “to claim that investing in cryptocurrency was simple and for everyone,” but the ASA upheld its decision.
Other companies whose crypto-related ads were banned by the UK regulator include Luno, crypto exchange Exmo Exchange, as well as crypto and stock trading platform eToro.
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