Ads are essential in the crypto industry. Companies looking to grow need exposure, and their ability to access the right platforms plays a vital role in effective scaling.
But in the United Kingdom, crypto ads are having a rough time. The kingdom's Advertising Standards Authority (ASA) has taken a hardline stance against crypto ads, and things don't appear to be changing anytime soon.
Crypto.com's "Misleading" Ad
To kick off 2022, the ASA approved an official ban on two ads for Crypto.com. The popular exchange went on a marketing spree in recent months, posting ads promoting how easy it is for customers to buy cryptocurrencies on Crypto.com's mobile platforms and additional offerings like yield earning and loans.
The agency deemed the marketing materials inappropriate and in breach of rules laid out by the U.K.'s Financial Conduct Authority (FCA). Allegedly, the ads didn't state risks involved in cryptocurrency investments and didn't specify cryptocurrency purchasing limits for credit cards.
The two apps were in-app placements. The first, published in September 2021, appeared on the Daily Mail app - a popular British tabloid newspaper.
The second ad, which aired as far back as July 2021, appeared in Love Balls - a mobile game available in the Apple App Store. This one was more egregious, promising users the opportunity to earn up to 3.5 percent interest in crypto - a number which, suspiciously, increased later to 8.5 percent.
A Contrast to the United States
Crypto.com took the ads down voluntarily, but has taken the ASA to task on the legitimacy of the ads. The company reportedly said the Daily Mail ad only touted how fast users could buy cryptocurrencies on Crypto.com. It was an ad for the exchange - not cryptocurrencies themselves.
As for the Love Balls ad, Crypto.com claimed it extended an offer for existing users. Again, the exchange argued it wasn't advertising cryptocurrencies.
Crypto.com has shelled out a heavy fortune on ads in the past few months. In November, the company made a huge splash in Los Angeles, purchasing the naming rights for the city's iconic Staples Center. The deal, worth a reported $700 million, kicked off in December, the location renamed the Crypto.com Arena.
The exchange also launched an ad campaign featuring Oscar-winning actor Matt Damon in October, and it is set to splash on a Super Bowl ad come February.
Risk Warnings Are Apparently a Huge Deal
Crypto.com sees success with ad campaigns in the United States, but the ASA is putting the brakes on marketing efforts outside the country. Interestingly, this isn't the first time the agency blocked marketing for crypto platforms.
In December, the ASA issued rulings against several crypto firms - including Kraken, Coinbase, Luno, eToro, and Exmo. According to the regulator, ads were banned for "irresponsibly taking advantage of consumers' inexperience and for failing to illustrate the risk of the investment."
Arguing against Coinbase, the ASA claimed the company put out a misleading promotion in a July 2021 Facebook ad. The regulator took issue with text claiming that £5 worth of Bitcoin in 2010 would be worth over £100,000 in January 2021.
The ASA claimed the ad "implied there would be a similar guaranteed increase in Bitcoin value over the next decade."
Coinbase was also flagged for not indicating that past performances aren't a guarantee of future performance. The company was forced to take the ad down.
Ruling against Kraken, the ASA took issue with a digital poster published in the London Bridge train station in August 2021. The ad was flagged for lacking a risk warning, the ASA arguing that the risk disclaimer only showed for one second.
"The risk warning only ran for one second at the beginning of a 20-second ad and we considered it presented the consumer with a large amount of information that would not be fully read or understood even if it was seen at all," the ASA's ruling added.
Crypto companies looking to advertise in the United Kingdom will need to ensure they meet requirements if they hope to curry favor from the ASA.