The high-risk profile of crypto investment and its dubious returns have made many suspicious of this activity. Some, including regulators, have likened investing in cryptocurrency to a form of gambling, and a good number of observers agree it is.
Now, the UK’s advertising watchdog has had to step in and issue yet another warning to companies that have been indulging in excessive and often misleading promotional practices in the country.
Misleading Ads Will Cost Companies Dearly
A new statement by the Advertising Standards Authority from Tuesday said that it has warned over 50 companies in the country over “problem ads.” All of the named companies would face sanctions should they not amend their advertisement campaigns by the set deadline of May 2. ASA will pass any offenders to the Financial Conduct Authority, which has the power to suspend licenses.
ASA has already been banning ads en masse, including by companies such as Coinbase, and numerous gambling firms along the way. The regulator cautioned that there has been an increase in the incidence of such practices:
“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible.”ASA
Cryptocurrencies have long been a divisive topic in the United Kingdom as their high-risk profile has definitely challenged consumers, businesses, and most recently regulators.
Do Not Regulate Crypto Under Gambling Laws
Some have said that crypto should be regulated under the Gambling Act 2005 Review, but many have dismissed the idea, arguing that it would be impossible for a regulator such as the UK Gambling Commission to take on regulating digital assets.
One proposal is to have advertisements for crypto restricted to the point where only high net worth individuals may see those ads, which will put the further onus on companies to use targeting properly to get their ads to the right people.