The Advertising Standards Agency has issued a warning to more than 50 companies that advertise cryptocurrencies.
The ASA has issued an enforcement notice instructing the companies to review their ads and to ensure that they understand and are complying with the rules.
Crypto advertisements are required to state that all cryptocurrencies are unregulated in the UK and that the value of investments are variable and can go down.
Ads also must not state or imply that investment decisions are trivial, simple, easy or suitable for everyone, neither should they imply a sense of urgency to buy or create a fear of missing out, or that investments are ‘low risk’.
The ASA said clamping down on troublesome crypto ads is a ‘red alert’ priority issue, and if the companies warned do not act by May 2, targeted enforcement action will be taken.
This includes non-compliant advertisers being reported to the Financial Conduct Authority.
Chief executive of the ASA, Guy Parker, said crypto has “exploded in popularity” in recent years.
“We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks.
“Working alongside the FCA, we’ll take strong action against any advertiser who fails to ensure that their ads are responsible.”
Sarah Pritchard, executive director of markets at the FCA, said the regulator will continue to work closely with the ASA to tackle unclear or misleading crypto advertising.
“People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website.
“Crypto assets remain unregulated and those who invest in them should be prepared to lose all their money.”
Last week, the FCA reported that the number of cryptoasset scam reports received had more than doubled in 2021.
The regulator received 6,372 reports of scams in 2021, compared with 3,143 in 2020, according to a Freedom of Information Request submitted to the city watchdog by Capital Block.
Although investment in cryptoassets is not a regulated activity, certain cryptoasset companies have been subject to money laundering regulations since 2020, which means these firms must be registered with the FCA.
By Sally Hickey