Coinbase, eToro Crypto Ads Banned for Misleading Consumers, Said UK Advertising Regulator

The U.K. Advertising Standard Authority (ASA) issued rulings against seven of the sector’s biggest firms, including Coinbase and eToro, for misleading and irresponsible ads promoting crypto investments.

The action taken by ASA comes after the regulator announced in July that misleading crypto marketing was a “red alert” priority and the agency would pay close attention to it. “We see this as an absolutely crucial and priority area for us” said Miles Lockwood, director of complains and investigations at ASA.

In today’s ruling the regulator criticized the ads as irresponsible “because it took advantage of consumer’s inexperience or credulity” and misleading “because it failed to illustrate the risk of the investment.”

eToro accepted that while the ad was aimed to include a risk warning to highlight the lack of regulation for cryptocurrency and the perceived level of risk associated with cryptocurrency assets, this warning was missing owing to a lapse in their review process.

Papa John’s is another of the companies targeted by the ASA for “trivialized” investing in crypto assets. Papa John’s, which claims to have been the first company accepting Bitcoin to buy two pizzas, offered “free bitcoin worth GBP10” when you spend GBP20 or more in pizza. This promotion was run in association with cryptocurrency exchange Luno Money, which was also warned by the regulator.

Coinbase faced additional allegations for misleading consumers because its ad referred to its competitors as “unregulated,” implying that Coinbase was regulated. ASA made a clear distinction between companies that could be regulated by the FCA and cryptocurrency services that in general are not.

In the U.K., advertising of financial products overseen by the FCA, which do not include cryptocurrencies, is usually subject to much stricter rules than the less onerous ASA standards. Yet, this may change soon as the U.K. Treasury may be considering extending the FCA’s power to review some crypto promotions. The ASA is also considering widening its crackdown to include other digital assets such as non-fungible tokens, given their recent popularity.