The UK’s Financial Conduct Authority Issued Warnings Against Over 50 Crypto Companies
The ASA recently issued a warning to over 50 cryptocurrency-related businesses, including Coinbase and eToro.
The Advertising Standard Authority (ASA) has stepped up its criticism of cryptocurrency-related businesses. It cautioned such companies against encouraging citizens to acquire digital assets using credit cards or to convert their pension funds to cryptocurrency such as bitcoin.
The British government and banking regulators are well-known for their strident opposition to the bitcoin industry. Andrew Bailey, Governor of the Bank of England, for example, claimed that digital assets “had no fundamental value” and that investors should be prepared to lose all their money.
Additionally, Nikhil Rathi, CEO of the Financial Crimes Authority, said that bitcoins are used in illegal activity. Additionally, he said that the British government should refrain from compensating those who invest in the asset class in the event of a loss.
The Advertising Standard Authority (ASA) is another watchdog that takes a negative stance on the subject. It issued an enforcement notice to more than 50 businesses that advertise digital assets today (March 22). Apart from establishing operational guidelines, the ASA advised those firms against encouraging consumers to purchase cryptocurrency using credit cards.
“It is definitely a step forward. This is a sector that we realise need improvement, as has the government,” said Nick Hudson, Operations Manager at the ASA.
Earlier this year, Chancellor of the Exchequer Rishi Sunak said that the government should safeguard residents from false cryptocurrency ads that might result in significant losses. However, the ASA believes that such regulations will not become law until 2023 and warns that immoral businesses would continue to promote their goods until then.
“Our involvement is critical at the moment. Advertisers are aware that the FCA regulation is imminent. This is an opportunity for them to make hay,” Hudson added.
Notably, the government issued warnings not just to obscure and doubtful cryptocurrency-related businesses, but also to some of the industry’s titans, like Coinbase and eToro.
Luno and Floki Inu Are Banned in the United Kingdom
The Advertising Standards Authority has previously prohibited certain deceptive bitcoin advertisements on British soil. In May of last year, various messages began appearing on London’s Underground and bus stations, declaring, “If you see Bitcoin on the Underground, now is the time to purchase.” The regulator recognised the marketing campaign’s sponsor as the cryptocurrency app Luno, calling it as very unethical.
The ASA said that these advertisements might entice novice investors into the digital asset ecosystem without them being aware of the inherent dangers. As such, it barred Luno from endorsing products.
Several months later, London’s transportation infrastructure served as a marketing platform for another cryptocurrency, this time the memecoin Floki Inu. The city’s officials said that such tokens should not be marketed until they have been fully researched.
Transport for London (TfL) underlined that its stations should not be used to advertise questionable items such as Floki Inu. The organisation quickly deleted the memecoin advertisements.