Luno’s advert telling people in the UK “it’s time to buy” Bitcoin has been banned by the nation’s advertising regulator for being irresponsible and misleading.
May 26, 2021 | AtoZ Markets – Cryptocurrency exchange Luno has fallen foul of the UK’s advertising watchdog for “misleading” posters displayed at bus and Underground stations in London.
Adverts with the slogan “If you’re seeing Bitcoin on the Underground, it’s time to buy” have been ubiquitous in Tube stations and on the side of London buses, a tangible sign of the recent surge in popularity of cryptocurrencies with retail investors.
But the Advertising Standards Authority (ASA) said on Wednesday the adverts underplayed the risks of investing in volatile and largely unregulated digital assets like Bitcoin. The decision on complaints about how cryptocurrencies are marketed to the public comes as UK financial regulators are closely eyeing the risks that digital assets pose for private investors.
“We concluded that the ad irresponsibly suggested that engaging in Bitcoin investment through Luno was straightforward and easy, particularly given that the audience it addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies,” the ASA said.
Luno, the exchange that is part of a group that also owns CoinDesk, has promoted its platform as an easy and secure option for individuals looking to buy cryptocurrencies, including Bitcoin and Ether. The advertising campaign formed part of a big push by the London-based company, which was bought by the Digital Currency Group last year, to boost its customer base in the UK. Fewer than 200,000 of the app’s 7 million users are located in the UK, the company said in April.
Luno Bitcoin advert “failed to illustrate the risk of the investment”
Luno’s campaign ran into trouble with the advertising industry’s self-regulatory body over complaints that it had “failed to illustrate the risk of the investment” and “took advantage of consumers’ inexperience or credulity”. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that companies offering cryptoassets to the public were coming under increasing scrutiny from UK regulators, including the Financial Conduct Authority.
As AtoZ Markets reported back in January, the FCA warned crypto investors that they “should be prepared to lose all their money”. The financial watchdog has also banned the sale of cryptocurrency derivatives and exchange-traded notes to retail investors. “The Advertising Standards Authority is another regulator with crypto in its sights, ready to censure more firms if they don’t stick to strict codes of conduct,” Streeter said.
In a response published by the ASA, Luno said the adverts would not appear again in the same form and that future ads would carry risk warnings. The ASA said it had told Luno “to ensure that their future marketing communications made sufficiently clear that the value of investments in Bitcoin was variable” and that both Luno and Bitcoin markets were not regulated.
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