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Friday, January 27, 2023

Financial Watchdog Bans Seven Ads in Crypto ‘Red Alert’

The UK’s advertising authority has banned seven bitcoin advertisements.

Following concerns that many advertisements fail to clearly express the hazards of investing, the Advertising Standards Authority (ASA) has declared cryptoassets, such as Bitcoin, a “red-alert priority.”

A pizza chain’s promotion and Facebook advertisements for a big bitcoin exchange were among the prohibited ads.

The Advertising Standards Authority (ASA) said it plans to issue new rules on bitcoin advertising.

All seven commercials or promos were “blocked for recklessly exploiting customers’ inexperience and neglecting to highlight the investment’s danger,” according to the statement.

Customers could acquire “free Bitcoin worth £10” when they spent £30 or more on the prohibited Papa John’s website, which also said: “Save £15 when you purchase £30 or more & get £10 worth of Bitcoin from Luno!”

The company stated it was part of their annual “Bitcoin pizza day” event, which commemorates the exchange of two Papa John’s pizzas for 10,000 bitcoins in May 2010. A tenth of a bitcoin is worth more than £350 million ($462 million) today.

According to the corporation, the marketing made no mention of cryptocurrencies or its appropriateness for investment.

The “free” Bitcoin offer, according to the chain, was not the same as a scenario in which a customer was offered the option to invest their own money in a financial product.

The ASA, on the other hand, determined that the offer “trivialized what was a serious and possibly costly financial choice, particularly in the context of the targeted audience, who were likely to have minimal awareness of cryptocurrencies.”

The Kraken ad, which prompted a complaint to the Advertising Standards Authority, was displayed on a digital poster at London Bridge station.

Despite the fact that it included a lengthy disclaimer, the ASA concluded that “consumers would not have had the opportunity to grasp the necessary information in the disclaimer, assuming they saw it at all, and that it was therefore not clear.”

Some legislators are questioning whether cryptocurrency advertisements should be allowed on London’s trains and buses.

The ASA declared in November that it was looking into advertisements for cryptocurrency Floki Inu, a so-called “meme coin” named after billionaire Elon Musk’s dog, that emerged on the underground.

The ASA said the inquiry is still ongoing, despite Floki Inu’s claims that their ads follow the regulations.

The prohibitions are part of a larger initiative that will result in new recommendations for cryptoasset promotion next year.

“Cryptoassets are a red-alert priority concern for us,” said Miles Lockwood, the watchdog’s director of complaints and investigations.

“Consumers need to understand the hazards of investing in cryptoassets, and businesses should ensure that their advertisements aren’t misleading or socially irresponsible by preying on people’s lack of knowledge about these complicated and volatile goods,” he added.

Over the coming few months, the ASA will continue to evaluate cryptoasset marketing, not just for cryptocurrencies, but also for NFTs and fan tokens, according to the ASA.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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