UK advertising watchdog promises 'hard and fast' crackdown on crypto

An ad campaign that was banned by the UK's ad watchdog. Photo: Getty Images
An ad campaign that was banned by the UK's ad watchdog. Photo: Getty Images

The UK's Advertising Standards Authority (ASA) will scrutinise all marketing related to cryptocurrencies, especially on social media, and clamp down on anything it deems misleading or irresponsible.

This comes amid crackdowns from the Financial Conduct Authority (FCA) as well as some commercial banks in the country.

The ASA told Yahoo Finance it is "planning to carry out proactive monitoring and enforcement of crypto advertising and will also scope out additional guidance in the coming weeks."

A report in the Financial Times said the watchdog ASA has identified cryptos as a “red alert” priority.

“We see this as an absolutely crucial and priority area for us,” Miles Lockwood, director of complaints and investigations at ASA, told the publication.

“Where we do find problems we will crack down hard and fast.”

Offending companies will be issued with warnings and may be required to add disclaimers on their advertisements.

The watchdog is also mulling whether further action is needed on social influencers promoting cryptocurrency.

Earlier this year the watchdog banned an ad campaign by crypto platform Luno, which appeared around the London underground and on buses, encouraging the public to buy bitcoin.

The ad read: "If you’re seeing bitcoin on the underground" or "on a bus" then "it’s time to buy”.

Read more: Cryptocurrencies under pressure amid decline in investor sentiment and UK crackdown

“The advertising industry’s self-regulatory body has been thrust to the forefront of efforts to supervise cryptocurrency advertisements because most crypto investments fall outside the scope of the UK’s strict rules for promoting traditional financial products, scrutinised by the Financial Conduct Authority” FT said.

That's not to say the FCA isn't taking action. Last month it ordered Binance Markets, one of the world’s largest bitcoin (BTC-USD) exchanges, to remove all of its advertising and financial promotions.

In one of the most significant moves by a regulator to date, the FCA said that the firm must not carry out any regulated activities in Britain without prior consent.

Since then, Santander (SAN) and Barclays (BARC.L) have told customers they will not be able to make payments from their accounts into Binance.

And the FCA has also warned consumers that if they invest in cryptos they "should be prepared to lose all their money.”

"Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the FCA said.

This is because investors are unlikely to qualify for protection under the financial services compensation scheme and could not seek redress through the financial ombudsman service.

Meanwhile the ASA was keen to point out a "clear separation" between ads for legitimate crypto investments and illegitimate scam ads.

For the latter, it said it is already taking action through its Scam Ad Alert system.

Watch: What are the risks of investing in cryptocurrency?