On Tuesday, the Advertising Standards Authority announced that it had sent more than 50 cryptocurrency companies enforcement notices asking them to review their ads and ensure that they are in compliance with advertising rules. The action comes as part of a regulatory crackdown on promotions in the industry.
The regulator also gave an ultimatum of the 2nd of May lest the targeted companies will be sanctioned if “problem ads” are not reviewed. The regulator also said that failure to comply by companies will see these advertisers be reported to the Financial Conduct Authority.
The Advertising Standards Authority, in its notice to these companies, gave guidance requiring that advertisers must ensure that they make it clear that digital assets are unregulated in the UK and must not urge people to buy a specific cryptocurrency or cryptocurrencies in general in these ads or make people feel like they are missing out if they don’t dive in on cryptocurrency.
The regulator failed to list the companies that it sent these enforcement notices to but, however, said in its Tuesday statement that “This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible.” It also said that it has formerly banned ads from some crypto firms including Coinbase over misleading ads.
The notice comes as part of the government’s effort to regulate the crypto space and ensure that people are not being misled. In January, the government announced that it was going to bring crypto ads under the same rules under which financial promotions thrive. This means, like other advertisers, advertisers in the crypto space will need to receive authorization from regulators. Although it was largely criticized, regulators proposed limiting crypto ads to individuals of high net worth and “big investors”. A consultation from the Financial Conduct Authority with the industry on the regulation of crypto ads is set to expire on Wednesday.
In a letter expressing concerns that the Global Digital Finance sent to the UK Finance Minister – Rishi Sunak, the Global Digital Finance’s director of government and regulatory affairs – Lavan Thasarathakumar said that “Rather than attempting to broaden the scope of existing legislation, stifling the market and attracting unintended consequences, a new bespoke regime should be implemented. This regime would include obligations for how crypto-asset promotions should be communicated and more generally would provide clarity on how crypto-asset firms should conduct themselves and how regulators should supervise them.”