UK watchdog cites “consumers’ inexperience or credulity” for recent crypto ad bans

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• Opinion

According to the UK advertising watchdog, crypto assets are a “red alert" priority. Seven mostly well-known and reputable crypto companies had their ads banned by the watchdog.

The watchdog said that seven companies had broken advertising standards authority rules. These included: Kraken, Coinbase, eToro, Coinburp, EXMO and Luno, together with a pizza chain promotion.

The ad from pizza chain Papa John’s stated “Free Bitcoin Worth £10”, and also “Save £15 when you spend £30 or more & get £10 worth of Bitcoin from Luno!” 

Another ad from Coinbase that went out on Facebook, stated:

“£5 in #Bitcoin in 2010 would be worth over £100,000 in January 2021. Don’t miss out on the next decade – get started on Coinbase today”

One of the issues that the watchdog had was “misleading claims about future returns”. This seems like a sensible reason for taking up an issue with any offender, crypto or otherwise.

Opinion

However, citing “consumers’ inexperience or credulity” as regards crypto as a reason for sanctions, is surely stretching the limits of the watchdog’s powers. 

Perhaps if the crypto companies in question were not established, or there was reason to believe that they had operated in a questionable way in the past, then a reason for a ban could certainly be argued.

But for the watchdog to just target ‘crypto’ as a whole appears to be just going along with the typical authoritarian line that crypto is just for money laundering and terrorist financing.

Would the watchdog sanction the banks for doing exactly the same thing? Surely it could be argued that “inexperience” and “credulity” might be two reasons for an investor in this day and age to buy many of the financial products offered by banks.

The financial landscape is changing fast. To keep up with the innovations provided by crypto companies and projects would tax any watchdog, so it’s understandable that sometimes decisions can be made that just aren’t based on sufficient understanding of the financial product.

Given the complexities under consideration here, it will possibly be many years before government departments have the necessary deep knowledge with which to make good, informed decisions about crypto. Some key hires will need to be made and public perception will need to change. Here’s hoping this can happen sooner rather than later…

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.