The British advertising watchdog, the Advertising Standards Authority (ASA), issued a “red alert” Enforcement Notice to over 50 crypto companies yesterday.
The ASA provided firms with a new set of guidelines to conform to by May 2, when the new rules come into effect.
The guidelines aim to protect consumers from “FOMO” (the acronym for “Fear Of Missing Out”) or predatory marketing tactics.
It specifically requires advertisers to state clearly that crypto is currently unregulated in the UK, that prices are volatile and investments high risk, and that profits made from crypto “may be subject to Capital gains Tax.”
The ASA’s announcement says that it will be working closely with Britain’s Financial Conduct Authority (FCA)—the UK’s leading financial regulator—to take action against companies that don’t comply with the new rules.
The FCA “worked closely alongside” the advertising watchdog “to distribute the Enforcement Notice.”
Crypto advertising in the United Kingdom
Crypto companies have fallen under renewed scrutiny in recent discussions about fair advertising across the world.
In the U.K., things have been heating up since the start of January, when the ASA banned two advertisements by crypto exchange Crypto.com on the grounds that they failed to illustrate the risks of trading crypto.
Two weeks later, the British Government introduced new legislation to protect consumers from misleading cryptocurrency ads. The legislation requires all crypto ads in the United Kingdom to be approved by the FCA or the Prudential Regulation Authority (PRA).
Earlier this month, the ASA also banned an advert for Dogecoin knockoff Floki Inu, after ruling that the meme coin’s “MISSED DOGE, GET FLOKI” slogan trivialized crypto trading and “exploited” consumer inexperience and fear of missing out.