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Cryptocurrency exchanges Crypto.com (CRO-USD) and Coinbase Global (NASDAQ:COIN) have breached the most advertising rules among its competitors, according to a recent Crypto Head’s report, which analyzes ads that were banned in the U.K. by the Advertising Standards Authority (“ASA”).
The report counted 13 advertising code violations by Crypto.com (CRO-USD) and 12 by Coinbase (COIN), topping the list of 11 crypto-focused firms. As for the rest of the catalog: Arsenal F.C. committed 9 breaches, Luno Money (9), Coinfloor (7), Ziglu (6), Skrill (6), Coinburp (6), eToro (6), Exmo Exchange (6) and Payward/Kraken (6).
The most common type of advertising breach was “misleading advertising” with a total of 44 occasions where this rule was broken, the report said. That means advertisers were misleading the viewer by “either suggesting things that are untrue, or leaving out information that is crucial in order for the viewer to form a balanced opinion,” as per the report.
The advertising of “financial products,” was the second most common breach with 29 separate violations. In other words, “crypto ads failed to mention the tax implications of investing in crypto, which is a breach of regulations as profits may be subject to capital gains tax,” for example.
And the number of “Qualification” breaches was 16. This kind of violation refers to instances where marketing materials are required to indicate any limitations or qualifications to the claims made in the ad.
Looking at Coinbase (COIN), in particular, its paid-for Facebook advertisement got banned on Dec. 12, 2021 after the ASA found a total of 12 code breaches. Crypto Head pointed out a misleading text from the ad that read “£5 in #Bitcoin in 2010 would be worth over £100,000 in January 2021. Don’t miss out on the next decade – get started on Coinbase today.”
While a raft of digital asset firms have taken measures to grow brand awareness as well as broaden the appeal of the emerging decentralized space to the public through a variety of marketing campaigns, regulators are voicing their concerns about the recent surge in crypto-related advertising.
The legislation evolving around digital asset markets are fuzzy and constantly criticized by industry participants. As a result, the average Joe that doesn’t have a good understanding about crypto could be misled by those advertisements.
“For example, unlike most investment options, crypto assets are not protected by the UK Financial Conduct Authority (“FCA”), though people unfamiliar with cryptocurrencies might see an advert and assume they are equally protected,” the report explained.
Some regulators, though, are making moves aiming to protect consumer interests, including those in India, Singapore and the U.K.
There are numerous crypto firms, especially over the past year, that have entered sports sponsorship deals to enhance consumer engagement. Both Crypto.com (CRO-USD) and blockchain platform Algorand (ALGO-USD) have partnered with FIFA ahead of this year’s World Cup tournament. In December 2021, crypto brokerage Voyager Digital (OTCQX:VYGVF) entered into a multi-year agreement with The National Women’s Soccer League to extend the league’s global marketing reach, in addition to providing players with direct financial support, crypto education and rewards.
Previously, (Feb. 9) crypto companies went all-in on Super Bowl advertising.