The U.K.’s advertising watchdog has banned a newspaper advert on the grounds that it irresponsibly promoted Bitcoin. A member of the public complained that the advert was misleading and socially irresponsible.
Following an investigation, the complainant’s objections were upheld by The Advertising Standards Authority (ASA).
“The complainant, who believed the ad targeted retirees, challenged whether the ad was:
1. misleading, because it failed to make clear the risks associated with Bitcoin investments, including loss of capital, and that neither Coinfloor Ltd nor the general Bitcoin market were regulated in the UK; and
2. socially irresponsible, because it suggested that purchasing Bitcoin was a good or secure way to invest one’s savings or pension.”
Coinfloor takes out Bitcoin advert in a regional newspaper
London-based crypto exchange Coinfloor ran an advertisement with the Northampton Telegraph on December 3, 2020. It featured an image of an elderly Coinfloor customer with the tag line, “Today there is no point keeping it in the bank – the interest rates are insulting.”
It continued by making several other points, such as the customer’s investment strategy (2/3 precious metals and 1/3 Bitcoin), her statement that she considers Bitcoin digital gold, as well as text about Coinfloor’s regular auto-buy service.
At the bottom of the advert, in small print, was the disclaimer.
“Investing in cryptocurrencies involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose.”
The ASA’s assessment concluded that the advert painted Bitcoin as a secure investment. Despite the disclaimer, they believe not enough emphasis was made on the risk of capital loss.
They also point out that the targeted readership was unlikely to possess an understanding of cryptocurrencies. What’s more, they raised concerns over Coinfloor’s regulatory status, saying that customers would have no redress with the Financial Ombudsman Service if something were to go wrong.
“The ad directly compared investing savings in Bitcoin with the use of regulated services, discouraging consumers from placing their money in banks.”
Coinfloor said the advert was based on the views of the customer featured. They point out her statements were clearly marked in a white box, italicized, and within quotation marks. In contrast, their propositions were contained within a different colored box.
The firm considered the disclaimer sufficient in laying out the risks involved with investing in Bitcoin. Furthermore, the advert did not make any claims on Bitcoin as a wise or secure investment.
The ASA said the advert must not appear again. Future adverts, if any, must make it clear that the value of Bitcoin could go down as well as up.
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