The British regulator is once again pointing out the need for better monitoring of the cryptocurrency market. This time it takes aim at the issues of ads and their providers. Those have a limited time to comply with the new guidelines.
1.5 months for verification
The local regulator of the UK advertising market, known as the Advertising Standards Authority (ASA), has issued new guidelines on the standards to which the cryptocurrency segment is to be subjected. Companies involved in the sector and encouraging any cryptocurrency-based services have until May 2 to review them and adjust their platforms, as well as the way they communicate, to the new rules. According to preliminary data, the guidelines are expected to affect 50 entities. The list includes all companies that have previously been subject to ASA rulings.
Agency representatives commented on the matter as follows:
“The introduction of the red alert is a priority issue for us, as we have recently banned several companies from crypto advertising on the grounds of misleading consumers, in violation of the principles of comity and business responsibility.”
The red alert requires advertisers to send clear signals to the audience of their content, indicating that cryptocurrencies are unregulated in the UK and the value of investments is volatile, with the risk of deep declines.
The ads are to be designed not to suggest that investments are safe, simple or easy to undertake. They also must not indicate low risk, the need to buy, or create fear of not doing so. After the deadline, advertisers who fail to comply with the new guidelines and the requirements contained therein will be reported to the financial regulator Financial Conduct Authority (FCA).
The ASA has interfered in the crypto asset advertising market before. In 2021, it famously banned ads created by Coinbase Europe, eToro, Papa John’s, Luno Money, Exmo Exchange, Payward and Coinburp. The reason was “irresponsible exploitation of consumer inexperience and failure to illustrate investment risk.” However, the regulations were vague at the time. In turn, the companies were not leaning towards socially responsible actions. By creating the red alert, the regulator decided to bail them out in this regard.