UK's advertising regulator, the ASA, has banned two Crypto.com ads as misleading because they failed to highlight the risk of the investment.
The UK Advertising Standards Authority (ASA) on Wednesday said it had banned two adverts from Crypto.com following a complaint.
The first ad, seen on September 1, 2021, in the Daily Mail app, featured text which stated, “Buy Bitcoin with credit card instantly.” The second ad, shown July 30 in the Love Balls cellphone game published by Lion Studios, said “Earn up to 3.5% p.a,” while the number cited in the text increased to “8.5%.”
"We understood that consumers would interpret the claim 'Earn up to 3.5% p.a.' which increased to 'Earn up to 8.5% p.a.' to mean that any deposit could increase by the highest amount shown," the marketing regulator said.
According to the ASA ruling, the ads failed to highlight the risk of investment, while also taking “advantage of consumers’ inexperience and credulity”.
The watchdog also objected to the suggestion that consumers should buy crypto on credit without also warning of the dangers of going into debt.
There were no fines issued, only warnings that future ads must include details that make clear that the value of investments in cryptocurrency could go down as well as up.
Upon learning of the ASA’s concerns, Crypto.com immediately removed both ads. The company has volunteered to go "above and beyond the ASA’s rules" by ensuring ongoing compliance with Financial Conduct Authority’s Treating Customers Fairly outcomes 2 and 3, which refer to fair marketing practices.
"We believe building a fully regulated industry is the best way to accelerate the world’s transition to cryptocurrency, which has long been our mission. Engaging regulators to ensure compliance and building trust remain Crypto.com’s highest priorities," the spokesperson said.
“We appreciate the collaborative dialogue and engagement from the ASA regarding advertising in the UK in this relatively new industry, and remain committed to working with them and regulators around the world to ensure all of our activities are compliant with the most recent regulatory guidelines.”
The ban adds to a host of other rulings against crypto-related firms from the regulator. In December, it banned seven crypto ads, calling crypto-assets a 'red alert' priority. The companies included trading platforms eToro and Coinburp; exchanges EXMO, Luno, Kraken, and Coinbase; as well as a promotion from pizza chain Papa John's.
It also comes amid a marketing push by Crypto.com. As AtoZ Markets reported in November, it signed an agreement with Anschutz Entertainment Group (AEG) to rename Staples Center in Los Angeles to Crypto.com Arena.
While the terms of the agreement were not disclosed, AtoZ Markets gathered from a person familiar with the deal that it was a 20-year contract worth $700 million. That makes the deal one of the richest naming rights agreements in sports.
As a reminder, Crypto.com has also signed a five-year sponsorship deal worth more than $100 million with Formula 1.
The Singapore-based company has been on a roll, courting sponsorship deals with multiple brands in the sports world, indicating a growing desire to capture the attention of an important demographic market: affluent, young audiences with an eye toward video games and sports.
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