The UK’s advertising watchdog says it will launch a crackdown this month on misleading cryptocurrency investment ads, as part of a move by regulators to protect consumers who trade in what are unregulated assets.
The Advertising Standards Authority (ASA) says it wants to make sure marketing for digital currencies such as Bitcoin and Ethereum makes clear the inherently risky nature of these investments.
Why it matters
Cryptocurrencies are a disruptive, but volatile, force in the world of finance. While they have attracted a lot of buzz, these virtual currencies are not regulated by the Financial Conduct Authority, the regulatory body for the UK’s financial-services industry, and are an inherently risky investment.
The ASA says it has identified the crypto sector as a “red alert” priority within financial advertising, and is planning “proactive monitoring and enforcement” of crypto-currency marketing. It plans to issue guidance to companies over the next few weeks.
It is also considering what action will be needed with regard to social media influencers who promote investments without making clear the risks.
Retail investors, the name given to individual and non-professional investors, have been piling into cryptocurrencies with the hope of big returns when elsewhere returns on savings are at a record low.
“We see this as an absolutely crucial and priority area for us. Where we do find problems we will crack down hard and fast” – Miles Lockwood, director of complaints and investigations, ASA.