“Mayday Mayday”: ASA Begins Targeted Enforcement Action Against Crypto Ads On 2 May –

The ASA has published an 
update this week about its scam alert programme. Consumers
can tell the ASA if they see a scam ad, and the ASA will alert the
National Cyber Security Centre, which can arrange to have scam ads
taken down.  Significantly, the ASA says that the majority of
Scam Ad Alerts it has seen over the last 12 months have been for
scams relating to cryptocurrency. This makes new enforcement action
very timely.

It starts targeted enforcement action regarding the advertising
of cryptocurrencies from 2 May. This follows on from the
publication in March 2022 of an Enforcement Notice which gives
guidance on cryptocurrency ads, crypto exchanges and ads or
promotions which otherwise involve the transfer, sale or supply of
cryptocurrencies.

CAP guidance states that when promoting cryptocurrencies –
this means coins themselves (for example initial coin offerings),
crypto exchanges or promotions that otherwise involve the transfer,
sale or supply of cryptocurrencies – advertisers must make it
expressly clear in the ad that:

• Cryptocurrencies are unregulated in the UK.
• Cryptocurrency profits may be subject to Capital Gains
  Tax.
• The value of investments is variable and can go down as well as
  up.

When designing campaigns for cryptocurrencies, advertisers
should ensure you do not trivialise investing in cryptocurrency or
take advantage of consumers’ inexperience or credulity.
Amongst other requirements, advertisers should take care not
to:

• Imply that the product or services are regulated.
• Imply that investments are safe or guaranteed, or that past
  performance is a guide for the future.
• Employ fear of missing out or imply that investment decisions
  are simple, easy or for anyone.
• Encourage people to invest using credit.

If advertisers break the rules, they are likely to face
sanctions including reporting advertisers to the FCA or trading
standards.  It is also worth noting that stricter rules are
coming. The direction of travel is that many kinds of crypto
assets, including cryptocurrency, and potentially NFTs, will be
brought into the scope of the Financial Promotion Regime and under
the watchful eye of the FCA, which wields more power to sanction
non-compliance than the ASA. The government has plans to legislate
for this, while and the FCA are consulting on its own set of
corresponding the new rules. Brands, advertisers and influencers
looking to tap into the crypto boom will need to watch this space
with care.

Originally Published by Lewis Silkin – AdLaw

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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