Yahoo Finance UK advertising watchdog issues fresh crypto ads crackdown
UK regulators have issued a "red alert" warning targeting cryptocurrency advertisements that are "socially irresponsible".
The UK's advertising watchdog, the Advertising Standards Authority (ASA), has issued an Enforcement Notice to more than 50 companies that have advertised projects and companies in the cryptocurrency sector.
The notice by the UK's advertising watchdog is a “red alert” signal to advertisers warning them not to dupe consumers with false cryptocurrency marketing.
Watch: Hammond: Big Finance's crypto adoption is now 'unstoppable'
The ASA has informed businesses that have been advertising cryptocurrency products to review the compliance of each advertisements as it prepares a crackdown on “misleading and irresponsible crypto ads”.
This comes just months before tough new measures are poised to be enacted by the advertising regulator that could prosecute, fine, or even shut down rule-breakers.
Read more: 'Crypto lobby groups are dictating terms in Washington'
The ASA will “implement sanctions if we do not see improvement” in the companies that advertise cryptocurrency projects.
The advertising watchdog added: “This is a red alert priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible."
Watch: Steve Hanke on crypto-lobbyists
The ASA is conducting a joint effort with the Financial Conduct Authority (FCA) to crackdown on advertisements that promote risky assets.
FCA executive director of markets Sarah Pritchard said: “People should be wary of any promotion promising high-investment returns and do further research before investing.
“Crypto-assets remain unregulated and those who invest in them should be prepared to lose all their money.”
The FCA is due to get fresh powers to monitor crypto promotions in the same way as it does other financial promotions.
Chancellor Rishi Sunak said in January he would support a change in the law to give the FCA the power to monitor cryptocurrency promotions.
The ASA has instructed advertising firms that deal in cryptocurrency promotions to clearly state that investing in the sector is currently unregulated, that it is not suitable for everyone, and not low risk.
Senior personal finance analyst Myron Jobson said: “Hopefully the ASA’s actions will help curb dubious and outright misleading adverts on cryptos.
"Adverts promoting crypto assets with lofty promises to investors are coming under intense scrutiny.
"At the start of the year, the government set out a plan to legislate to address misleading crypto-assets promotions and bring them into line with other financial advertising.
"Greater regulation on the advertising of cryptos can’t come soon enough.”