UK Regulatory Bodies Crack Down on Cryptocurrency Advertising and Introduce New Measures
Latest Updates in Marketing Law: May Edition
In a move to protect consumers and ensure advertising integrity, the Advertising Standards Authority (ASA) in the UK has tightened regulations on cryptocurrency advertising. The new rules require ads to be clear, fair, and not misleading, fully informing consumers about the potential volatility and risks of cryptocurrency investments.
Recent enforcement actions by the ASA highlight the need for transparency. For instance, the banning of Coinbase’s advertisement for failing to clearly warn viewers about these risks, with the ASA citing that the ad misrepresented crypto investments by lacking sufficient risk disclosures.
The regulatory enforcement is aligned with the UK’s Financial Conduct Authority (FCA), which has updated rules in the past two years targeting irresponsible crypto promotion. This includes requiring transparency and risk warnings in marketing materials. The ASA and broadcasting bodies, such as Clearcast, scrutinize crypto ads rigorously, often rejecting or banning campaigns that make unsubstantiated claims or lack consumer protections.
However, despite these crackdowns, a significant number of non-compliant crypto ads remain active in the UK market, raising concerns about regulatory gaps in enforcement. This cautious regulatory approach is partly driven by the crypto sector’s history of scams and volatility.
The UK’s regulatory framework still lags behind the EU’s MiCA regulation, which provides a more harmonized crypto advertising regime across member states. UK regulations impose stringent Anti-Money Laundering (AML) checks on crypto apps, with 90% failing these tests, impacting their advertising eligibility and compliance risk.
In other news, the Committee of Advertising Practice (CAP), BCAP, and the European Commission have published further advice for companies on environmental claims. The CSA is set to publish codes of conduct on environmental advertising, which is expected to impact TV channels.
A UK and EU digital regulation timeline, accessible from a web browser, has also been created, setting out laws and regulations that are in force and in the pipeline. The ASA's Copy Advice Team has closed its copy advice telephone line, but a Media and Entertainment webinar series is underway. Recordings are available for digitalisation of advertising and online safety sessions, and upcoming discussions on the future of TV and sport are open for registration.
The European Court of Justice has ruled that only the words on the actual online order button are relevant when assessing whether an online order makes it clear that clicking on it obliges a consumer to pay. This ruling could have significant implications for online businesses.
In the realm of traditional advertising, the FCA forced John Lewis to withdraw a potentially misleading home-contents insurance ad. Pret a Manger has been advised to rethink its subscription service of five barista-made drinks for £20 a month due to customer complaints. The Competition and Markets Authority (CMA) has published papers on online choice architecture and analyzed evidence on how digital design can potentially cause harm for competition and consumers.
These developments underscore the ongoing efforts by regulatory bodies to maintain fair and transparent advertising practices in the UK, particularly in the rapidly evolving digital and cryptocurrency sectors.
- The commitment towards fair and transparent advertising practices extends beyond cryptocurrency, as the Committee of Advertising Practice (CAP), BCAP, and the European Commission have also published advice for companies on environmental claims, prodding TV channels to abide by the expected new codes of conduct on environmental advertising.
- Simultaneously, politics and general news have been affected by regulatory decisions, with the European Court of Justice ruling that only the words on the actual online order button are relevant when assessing whether an online order makes it clear that clicking on it obliges a consumer to pay, which could have significant implications for online businesses.
