‘Irresponsible’ bitcoin ads banned for being misleading

An ad campaign telling people it was “time to buy” bitcoin was banned for misleading after UK regulators ruled that investing in cryptocurrency “irresponsibly” was straightforward.

The Advertising Standards Authority (ASA), the UK’s independent advertising regulator, ruled on Wednesday that the ads are exploiting consumers’ lack of experience and creating the false impression that investing in Bitcoin is easy.

Crypto Exchange Luno competed on public transport in London in February with the message, “If you see Bitcoin on the tube, it’s time to buy.”

The ad sparked complaints to the advertising regulator about whether the news was misleading in not depicting the risk of the investment and whether it exploited the “inexperience or gullibility” of consumers.

Also read: ‘Overconsciousness’: Why Men Under 30 Are Mostly Men Trading Bitcoin

The ASA said the presence of the ads on public transport in London meant that they were likely to be seen by those with no financial knowledge and experience of Bitcoin, who would expect them to be regulated with legal protections for investors. In addition, the UK Advertising Code requires that in investment marketing it is clear that the value of investments is variable and can go up as well as down.

Indeed, money invested in Bitcoin
BTCUSD, + 6.71%
has been exposed to price volatility that could result in both gains and losses, the ASA said, and the unregulated nature of the crypto market means consumers cannot seek recourse through ombudsman services.

“We viewed the fact that Luno and the Bitcoin market were unregulated as essential information consumers needed to make informed decisions about Luno’s service and should have been clarified in the ad,” the ASA said in their decision. This formed the basis for concluding that the campaign was misleading.

The regulator also said that the statement “It’s time to buy” is a call to action that creates the impression that investing in Bitcoin is straightforward and accessible.

“We understood that bitcoin investments are complex, volatile, and subject to loss for investors, and we believed that contrary to what the ad gives, the investment is simple and conventional,” the ASA said. “We concluded that the ad irresponsibly indicated that Bitcoin investing through Luno is straightforward and straightforward, especially given the audience,” she added.

Plus: Most Bitcoin investors are inexperienced and shy of volatility. You play Russian roulette, says this analyst.

The ASA’s decision came after Bitcoin and other crypto assets suffered a price drop under increasing oversight by regulators.

Bitcoin price lost up to 50% of its value from highs above $ 63,000 in April, but has rebounded somewhat and is now trading at around $ 39,000. The value of other popular crypto assets like Ethereum
ETHUSD, + 12.28%
and Dogecoin
DOGEUSD, + 6.02%,
also posted sharp declines last month.

“Companies offering crypto assets with high promises to investors are under intense scrutiny and regulators are increasingly concerned about the risks these types of investments can pose to consumers,” said Susannah Streeter, analyst at broker Hargreaves Lansdown .

“Most cryptocurrencies are not only extremely volatile, they are also unregulated. This not only increases uncertainty, but also means that investors have little or no protection against fraud,” added Streeter.

In the UK, financial regulators warned of the risks of investing in crypto assets in January The Governor of the Bank of England wanted digital assets in a press conference earlier this month.

“I’m afraid they have no intrinsic value,” said Andrew Bailey. “Only buy them when you are ready to lose all your money.”

Bailey’s comments added to the concerns of Christine Lagarde, head of the European Central Bank in January called for global regulation of bitcoin Stop “fun business” and money laundering.

According to the ASA, Luno said the ads would not reappear in the form complained of.

MarketWatch has contacted Luno for a comment.

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