We wish to bring to your attention that on Tuesday (March 22, 2022), the Committee of Advertising Practice (“CAP”), as part of the Advertising Standards Authority (“ASA”), has issued an enforcement notice (“Notice”) with regards to advertisement of crypto currency:
“Ads for cryptocurrencies have been ruled misleading and socially irresponsible and also in breach of rules which apply to ads for financial.”
This ruling applies to ads for cryptocurrencies, crypto exchanges and ads or promotions which otherwise involve the transfer, sale or supply of cryptocurrencies, targeted at UK consumers or that are targeted globally on the behalf of UK-based advertisers. The ruling will be enforced by the Financial Conduct Authority (“FCA”).
The main requirements of the CAP notice are:
- All ads must expressly and prominently state the following: (i) Cryptocurrencies are unregulated in the UK; (ii) Cryptocurrency profits may be subject to Capital Gains Tax; (iii) the value of investments is variable and can go down as well as up.
- Qualifications in digital poster advertising must be visible, and qualifications presented at the bottom of a webpage are unlikely to be sufficient. Qualifications should be clearly presented above the fold.
- Any claims for rates must be representative (and supported by documentary evidence), and make clear how the rate is calculated and what significant conditions apply, e.g. the type of cryptocurrency, the amount or any time period required.
- The ASA would expect advertisers to do all they can to include all significant conditions in an ad and as much information as possible.
- Ads that contain problem claims will be a problem (example, cryptocurrencies are a good investment in pension). The inclusion of a qualification will not render them compliant.
The ASA further explained and highlighted that the notice and guidelines does not apply to the general retail of items where cryptocurrency is offered as a payment option, or the general retail of cryptocurrency-themed merchandise. This notice also does not address the specific descriptive content for the sale of other forms of crypto-assets such as utility tokens (otherwise known as fan tokens) or non-fungible tokens (NFTs), however, all such advertising is subject to the broader CAP Code and future enforcement action is planned for these other forms of crypto-assets.
If you have any questions or required clarifications, our privacy-cyber team and cyber experts, will be happy to assist.
