Crypto.com flagged by UK advertising watchdog over misleading NFT ads
The UK’s Advertising Standards Authority (ASA) has flagged Crypto.com’s ads relating to non-fungible tokens (NFTs) for being misleading to investors and failing to identify the risks associated with the asset class.
The faulty ads were paid ads on Facebook involving the promotion of NFT project Turtle United seen in July 2022. The ASA challenged the ad on three main grounds, saying it failed to “illustrate the risks of NFT investing,” did not disclose embossing. , and provided unverifiable assurances to investors.
“Because the ad did not contain any risk warning making consumers aware that the value of NFTs could go down as well as up, or that they were an unregulated crypto-asset, we concluded that the ad was misleading,” the ASA said.
Crypto.com defended itself by claiming that the ad is no longer visible on the platform and reasonably believed that it did not breach any of the ASA’s rules. The digital asset exchange argued that since NFTs were not mentioned in the Treasury’s reports on digital assets, it assumed they were not financial products.
Despite Crypto.com’s defense, the ASA upheld the complaint on the grounds that NFTs can function as an investment due to the description of the digital collectible as “offering a lot of value.” It added that the ad violated the Free Principle rule as it omitted that investors must pay a coin fee of 0.2 ETH, equivalent to £250 ($302).
In its final ruling, the ASA warned that the ad could only be shown in its current form again if the proposed changes are implemented. The decision by the ASA has been described as mild compared to previous punitive actions against virtual currency advertisers, including the use of fines.
Not the first time for Crypto.com
This is not the first time Crypto.com has had a run-in with the ASA, since in January the exchange had two advertisements flagged by the regulator. The first ad was published on the Daily Mail app, reading “Buy bitcoin with credit card instantly”, while the second purported to suggest that investors could earn up to 8.5% per annum.
At the time, no fines were issued, but the ASA ordered the ad pulled and warned that all ads must disclose the risks associated with virtual currencies. Crypto.com agreed with the ASA’s claim, noting that it would go the extra mile to ensure it does not break the rules.
“We appreciate the collaborative dialogue and commitment from the ASA regarding UK advertising in this relatively new industry and remain committed to working with them and regulators around the world to ensure that all our activities comply with the latest regulatory guidelines, ” said the Crypto.com spokesperson.
See: The presentation of the BSV Global Blockchain Convention, Buzzmint: Elevating NFTs
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