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UK’s ASA bans crypto ads for failing to highlight involved risks

By:
on Dec 15, 2021
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  • The regulator banned ads from multiple companies, including Coinbase and Papa John’s.
  • ASA claims the ads it banned were irresponsibly taking advantage of consumers.
  • The watchdog claims cryptocurrencies are a red-alert priority issue at the moment.

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The UK’s Advertising Standards Authority (ASA) has banned several crypto ads failing to mention that crypto trading comes with immense risk. A report unveiled this news earlier today, noting that the watchdog took this action because the ads were irresponsibly taking advantage of consumers’ inexperience and failing to illustrate the risk of the investment.

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According to the report, the outlawed ads were from renowned crypto trading platforms, including eToro, Coinburp, Coinbase Europe, Luno Money, Exmo Exchange, and Payward. While most of the ads were from crypto platforms, pizza chain Papa John’s found itself in the mix, with ASA banning an advert on its website and Twitter handle.

The ad read promised Papa John’s customers that they could save $19.88 (£15.00) if they spent $39.76 (£30.00) or more at its restaurants. The ad also promised customers $13.25 (£10.00) worth of free Bitcoin (BTC/USD) from Luno.

Papa John’s claims it was promoting Bitcoin pizza day

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In its defense, the pizza chain said the ad was part of its annual celebration of BTC pizza day, an event that marks the day a Florida man named Laszlo Hanye paid for two Papa John’s pizzas using 10,000 BTC on May 22, 2010. 10,000 BTC is worth north of $476 million (£359.51 million) at the moment.

Papa John’s added that its ad did not mention investing in BTC. Instead, it only offered customers a way to earn free BTC. Nonetheless, ASA maintained that the ad trivialized a serious and potentially costly financial decision.

The agency added that,

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

ASA claims Coinbase guaranteed investors returns

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Coinbase’s ad was a paid-for promotion on Facebook, and it read $6.61 (£5.00) in 2010 would have been worth $132,228.70 (£100,000.00) in January 2021. Don’t miss out on the next decade – get started with Coinbase today. Per ASA, this ad was misleading because it implied BTC’s value would have a similar increase over the next decade.

ASA added that Coinbase did not inform investors that the coin’s past performance was not a guide for the future.

Miles Lockwood, ASA’s Director of Complaints and Investigations, said cryptos are a red-alert priority issue for the agency. He added that consumers need to know about the risks of investing in cryptos. To this end, the agency believes companies in the space should ensure their ads are not misleading or socially irresponsible.

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