With the crypto regulatory framework taking shape, advertising remains in the spotlight. UK advertising regulator, The Advertising Standards Authority (ASA) banned an NFT promotion by Crypto.com on December 21.
Crypto exchange Crypto.com had a Facebook ad banned by the U.K.’s Advertising Standards Authority (ASA), falling foul of the industry’s self-regulatory organization for the second time this year.
The ad for Crypto.com NFT was seen on the social media platform in July. Non-fungible tokens, or NFTs, are distinctive tokens on the blockchain connected to physical assets. The ASA objected to the advertisement because it failed to highlight the danger associated with investing in NFTs and failed to make it clear that fees would be charged.
Two of the company’s advertisements were banned by the Advertising Standards Authority (ASA) in January for being reckless and deceptive, preying on consumers’ inexperience or credulity, and failing to make it clear that cryptocurrency investments are not regulated in the United Kingdom.
“Because the [Facebook] ad did not include any risk warning making consumers aware that the value of NFTs could go down as well as up, or that they were an unregulated crypto asset we concluded that the ad was misleading. We told Foris DAX Global Ltd t/a Crypto.com that their advertising must make clear the risks of NFTs … . They should also not omit material information regarding fees and charges on their platform.”
In reaction to the ASA’s ruling, Crypto.com maintains that the NFTs offered on its site are not financial in nature. In addition, it claimed that the advertisement did not specifically advertise any particular NFTs but rather the exchange itself, calling the regulator’s requirement unreasonable.
Crypto.com also disputed the requirement to specify costs by claiming that the ad in question only mentioned buying NFTs, which did not involve any fees for payment methods, and did not highlight the company’s selling potential.
Additionally, Crypto.com noted that clients who decide to post an NFT for sale were provided explicit warnings about the accompanying expenses. Clients using the platform to mint their own NFTs were also alerted of such fees before being able to use the service.