As the crypto industry has grown, various governments around the world have intervened to protect consumers from misleading ads. The latest actions on misleading crypto advertising have been taken by authorities in the UK and Spain.
Details Of The Crypto Ad Crackdown
In the UK, the government has announced tougher measures regarding how it scrutinizes crypto advertising. The UK government will now crack down harder on ads that it views as misleading. This new crackdown will be overseen by the UK’s finance minister Rishi Sunak. According to a recent announcement by the UK government, crypto-related ads will now be regulated under the same rules as other financial promotions.
Previously, crypto advertising has been under the purview of the Advertising Standards Authority (ASA), which has already banned several crypto ads for being misleading. Under the new rules, crypto ads will be regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA). The FCA has come down hard on the crypto industry, and it has issued warnings regarding the sector in the past. At one time, it was revealed that the FCA had placed 87 crypto firms under investigation.
Global Effort To Regulate Crypto Ads
Besides the UK, Spain has also announced more stringent measures for the crypto industry. In Spain, the new rules cover the promotion of crypto projects by celebrities. The new rules state that influencers with over 100,000 followers must give prior notice to the authorities before promoting a crypto project. If they fail to do so, influencers could face fines of up to $341,000 beginning on February 17, 2022.
The rules were introduced shortly after the Spanish soccer star Andres Iniesta promoted the Binance exchange to his Instagram and Twitter followers. Besides the influencers, the rules extend to companies behind the project and the ad agencies that they hire.
These new rules in Spain represent the first comprehensive rules on crypto ads in the EU. Thus far, the EU has not created rules for crypto advertising for member nations.
Singapore Bans Ads And Bitcoin ATMs
Singapore has also tightened the rules of crypto advertising in the country. According to a recent circular by the Monetary Authority of Singapore (MAS), providers of cryptocurrency services are banned from promoting their services through ads. Besides that, the MAS has banned all Bitcoin ATMs in the country. The MAS further stated that crypto was a high-risk investment that was unsuitable for the general public.
Crypto advertising, especially through influencers is an area of regulatory ambiguity – even in the US. This was recently highlighted in the lawsuit filed against various celebrities, including Kim Kardashian. In the lawsuit, the celebrities are accused of promoting a crypto project that turned out to be a pump and dump scheme.
Summary
The lack of comprehensive regulation on crypto ads means that consumers are susceptible to false advertising. Consequently, potential investors should always conduct due diligence, even when a project is being promoted by a well-known celebrity. Previously, Facebook had issued a blanket ban on crypto advertising, although it has since lifted the ban, but with strict requirements.
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