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Crypto ads banned by U.K. watchdog for failing to highlight risk

Crypto ads banned by U.K. watchdog for failing to highlight risk

December 17, 2021: -On Wednesday, the U.K. advertising watchdog banned seven cryptocurrency ads and said they must not appear again.

The Advertising Standards Authority said that the ads were “banned for taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.”

The banned ads include a website and Twitter post from a pizza chain and a digital poster from a crypto exchange.

Most of the banned ads were put out by crypto exchanges and crypto trading platforms.

Companies that got affected by the bans include eToro, Coinburp, Coinbase Europe, Luno Money, Exmo Exchange, Payward, and Papa John’s G.B.

Papa John’s website ad stated, “Free bitcoin worth £10” and “Save £15 when you spend £30 & get £10 worth of Bitcoin from Luno!” The Twitter ad was similar.

Papa John’s said that the ads were part of an annual celebration of “Bitcoin pizza day,” which marks when two Papa John’s pizzas were bought for 10,000 bitcoins in May 2010. Today, the exact amount of bitcoins would be worth $482 million.

The pizza chain is arguing that the ad did not comment on investing in bitcoin, and the promotion only offered a mechanism for customers to get free bitcoin.

But the ASA concludes that the offer “trivialized” a “serious and potentially costly financial decision.”

“The ads were addressed to a general audience, and we considered that most of those who worked in a promotion linked to buying pizza were likely to be inexperienced in their understanding of cryptocurrencies and the risks inherent in doing so,” it said. “We further noted that the ads contained no risk warnings about cryptocurrency,” it added.

In its ruling, the ASA said the ad was misleading as it implied there would be a similar guaranteed increase in bitcoin’s value over the coming decade. It did not clarify that past performance was not necessarily a guide for the future.

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

“Consumers need to know about the risks of investing in crypto assets, and companies should make sure that their ads are not misleading or socially irresponsible by taking advantage of consumers’ lack of awareness around the complex and volatile products,” he added.

This is not the first time the ASA is banning crypto ads. In May, an advertising campaign that tells people in the U.K. “it’s time to buy” bitcoin was banned by the ASA.

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