UK’s HM Treasury Tightens Rules To Address “Misleading” Crypto Ads

The UK government has been proactive in cracking down on “misleading” cryptoasset advertisements.

The government on Tuesday tightened rules on crypto-related promotions, in order to bring them in line with other financial advertisements.

“We are ensuring consumers are protected, while also supporting the innovation of the cryptoasset market,” Rishi Sunak, Chancellor of the Exchequer said in a release.

Such a move would balance both innovation and makes sure that these crypto ads are “fair, clear, and not misleading.” The rules set out by the government will work to mitigate the risks of consumer harm, thus ensuring that people are aware of its volatility and investment risks.

The UK has been considering its regulatory response to the crypto industry with the Cryptoasset Taskforce, set up in 2018.

Nevertheless, the government has given a green signal to support innovations in cryptoassets and recognizes the benefits of products such as stablecoins, like Tether and Dai, as a means of payment.

In fact, an estimate of around 2.3 million young Brits hold cryptocurrencies, mainly Bitcoin, Ethereum, and Ripple, a detailed research conducted by FCA in 2021, revealed.

A Surge in Crypto Ads on London Transport

The move comes at a time when cryptocurrency adverts reached record levels on London public transport in 2021, attracting people into risky investments.

Around 39,560 crypto adverts from 13 firms appeared on London transport in a span of six months between April and September 2021, according to records obtained by the Guardian from Transport for London (TfL).

Crypto promotions on gambling, meme coin, and the infamous “time to buy Bitcoin” campaign by Luno exchange, was running across London’s underground networks and busses.

Crypto companies have totally spent £825,245 to advertise on TfL tube and train services since 2018, the Guardian data stated.

According to a spokesperson from TfL, all these ads contained a tiny disclaimer at the end – barely visible – stating that crypto is unregulated in the UK and the values are highly volatile.

Furthermore, the transport body has written to both the Financial Conduct Authority (FCA) and ASA, seeking further guidance on vetting ads that are being investigated by the ASA.

The ASA Has Been Busy Already

The UK’s advertising regulator, Advertising Standards Authority (ASA), classified crypto marketing as a “red alert priority”, banning seven crypto ads. The banned adverts include  Papa John’s Pizza promotion on free Bitcoin, Coinbase paid Facebook promotion, Payward: A digital poster for Kraken exchange among others.

Back in 2019, the ASA upheld complaints against promotion from BitMEX derivatives platform, which according to ASA featured a graph that exaggerated the returns on Bitcoin investments.

“Consumers need to know about the risks of investing in crypto-assets and companies should make sure that their ads aren’t misleading or socially irresponsible by taking advantage of consumers’ lack of awareness around these complex and volatile products,” Miles Lockwood, ASA’s director of complaints and investigations, stated last month.