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British regulator clamps down on crypto firms for irresponsible ads

British regulator clamps down on crypto firms for irresponsible ads
22 Mar, 2022
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Advertising Standards Authority (ASA), the self-regulatory organisation of the advertising industry in the United Kingdom, has issued an ‘Enforcement Notice’ to over 50 companies which advertise cryptocurrencies, instructing them to review their ads and to ensure they are taking care of their consumers’ interest. The move was necessitated after the UK advertisement watchdog recently called a crypto ad “irresponsible” for exploiting investors’ buying and selling patterns.

ASA maintained that the recently served notice provides ‘guidance’ to the crypto industry on how to stick to the rules and has also warned that it will monitor for ‘compliance’ and ‘implement sanctions’ if it doesn’t witness improvements. The authority has also been categorical   that 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 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’,” as shared by ASA in an official statement.   

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ASA was also deemed it a ‘red alert’ priority issue for and has recently banned several crypto ads for misleading consumers and for being socially irresponsible. It is also working closely alongside the Financial Conduct Authority (FCA) to take action against those who appear unable or unwilling to abide by the rules.  

Going forward, the ASA’s compliance team will carry out a ‘follow-up monitoring’ exercise and may resort to ‘targeted enforcement action’ if such incidents reoccur. This will include non-compliant advertisers being reported to the FCA, who have worked closely alongside the advertisement watchdog in helping to distribute the Enforcement Notice.    

Meanwhile, Advertising Standards Council of India (ASCI), last month, had announced a set of advertising guidelines to be followed by all Virtual Digital Assets (VDAs) and services such as cryptos or NFTs (non-fungible tokens) to protect consumer interest.

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