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UK advertising watchdog proposes scrutiny on crypto influencers

By Neil Dennis

10:32, 9 July 2021

Cryptocurrency regulation

Britain's advertising watchdog is to join the UK's broad regulatory push to closely monitor the cryptocurrency sector, including scrutiny of influencers, such as Elon Musk, promoting digital assets on social media.

"Cryptocurrency advertising is a key priority for us," a spokesperson for the Advertising Standards Authority (ASA) said on Friday, adding that the regulator will enforce bans on misleading and irresponsible material across media channels.

In a hint that high profile advocates of cryptocurrency, such as Tesla founder and chief executive Elon Musk, may be having too much influence over social media, the ASA added: "We are also considering whether further action is needed in addition to current ongoing investigations of social influencers promoting cryptocurrency."

Regulatory scrutiny

Cryptocurrency has faced tight scrutiny across the regulatory landscape in the UK. The Financial Conduct Authority (FCA) has banned some products, including the sale of crypto-derivatives to retail investors.

Less than two weeks ago, the FCA ordered cryptocurrency exchange Binance to cease all regulated activities in the UK after reports of unauthorised trades with Japanese citizens.

At the same time, the FCA warned British investors to be sceptical of adverts suggesting they could win high returns on cryptocurrency trades.

ASA clampdown

The advertising watchdog said it was concerned that since cryptocurrency has exploded in recent years, there was a danger of people investing life savings which they later lose, based on poor understanding.

DOGE/USD

0.38 Price
-0.340% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

BTC/USD

87,378.35 Price
-1.070% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

ETH/USD

3,159.10 Price
-3.800% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

XRP/USD

0.67 Price
-8.790% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

"As such, we are planning to carry out proactive monitoring and enforcement of crypto advertising and will also scope out additional guidance in the coming weeks," the regulator said.

It added: "We recognise the importance of the role we play currently in regulating ads to ensure they don’t mislead consumers about the risks of this product and are not irresponsible in how they promote them."

Crypto scams

The ASA also made it clear that such measures would be in addition to the work it is already doing in preventing scam cryptocurrency operations, such as advertising for bogus initial coin offerings and other fraudulent activity.

"We are already taking action where we can to disrupt online scams through our Scam Ad Alert system. This was set up in partnership with the major digital advertising and social media platforms, including Facebook and Google," the ASA concluded.

Crypto markets

By midday in London, the crypto market was little changed from overnight levels. Bitcoin was up 1.3% at $32,975, while ether was down 3% at $2.104.

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+1.41%

Read more: UK regulator bars crypto platform Binance Markets

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