The UK watchdog has banned adverts by cryptocurrency company Luno that said it was “time to buy” bitcoin from reappearing in their current form, calling them misleading and irresponsible.
Luno – which is owned by Grayscale-owner Digital Currency Group – had put up ads across London’s transport network which said: “If you’re seeing Bitcoin on the Underground, it’s time to buy.” A similar message appeared on buses.
But the UK’s Advertising Standards Agency on Wednesday said it had upheld complaints about the adverts, and ruled they “must not appear again in the form complained about.”
The ads were misleading because they did not state clearly that bitcoin is a highly volatile investment that can go down as well as up, the advertising industry’s self-regulatory body said. The agency also said the ads did not make clear that neither Luno nor the bitcoin market was regulated within the UK, meaning retail investors are not protected.
“We understood that Bitcoin investment was complex, volatile, and could expose investors to losses and considered that stood in contrast to the impression given by the ad, that investment was simple and conventional,” the ASA said.
“We concluded that the ad irresponsibly suggested that engaging in Bitcoin investment through Luno was straightforward and easy, particularly given that the audience it addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies.”
A spokesperson for Luno said: “We acknowledge the ASA ruling and will ensure that future Luno adverts feature an appropriate warning as to the risks of cryptocurrency. The advertising campaign at issue in the ASA ruling has now concluded, and the small number of adverts that are still in circulation are being phased out.”
The ASA’s ruling follows signs that regulators around the world are increasingly focused on cryptocurrencies and the threat the volatile assets could pose to inexperienced investors.
Bank of England governor Andrew Bailey said earlier in May that cryptocurrencies aren’t currencies and investors should be prepared to lose all their money.
China’s central bank warned financial companies about accepting cryptocurrencies as payment earlier this month, causing bitcoin to plunge.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Companies which offer crypto-assets with lofty promises to investors are coming under intense scrutiny, with regulators becoming increasingly concerned about the risks that these types of investment can pose to consumers.”