The ASA issued new recommendations on non-broadcast advertising for crypto-assets at the end of last week (see here for more information).
The guidance follows a slew of findings that a number of crypto-asset ads violated the CAP Code, as well as the ASA’s declaration of crypto-asset advertising as a “red-alert priority problem” in November 2021 (see here).
The guidance explains what “crypto-assets” entails and provides an outline of the current situation of crypto-assets financial legislation.
In terms of advertising, the advice clarifies the ASA’s expectations for crypto-asset ads to adhere to the CAP Code.
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Advertisers must clearly disclose that crypto assets are not regulated by the FCA and are not covered by financial compensation programs; this information must be communicated in a legible and easily visible manner.
Clarity on financial information and risk– Financial information should be presented to consumers in an easy-to-understand manner, and investment risks should be clearly stated. Ads should also avoid misleading consumers by omitting important information, such as the fact that the marketed product is a crypto-asset.
Be open about volatility — The ASA has made it plain in a number of judgments that crypto-asset advertisements must include a statement that explicitly states that the asset is volatile.
Avoid abusing customer inexperience – Advertisements should not exploit consumer inexperience or lack of understanding, such as by trivializing investment risk.
Advertisers should also be wary of attempting to capitalize on customers’ “fear of missing out.” The nature of crypto-assets should be clear from the ad’s content, and advertisers should pay particular attention to the language used to ensure that the assets are explained in a way that consumers can understand.
Crypto-asset advertising is evidently a hot topic for the ASA and understandably so, particularly with the rapid rise of NFTs putting crypto-assets firmly in the broader public consciousness.
Whilst the guidance is not exhaustive and does not bind the ASA, advertisers should consider the advice carefully to understand how they can take steps to ensure ads do not mislead and do not promote crypto-assets in a socially irresponsible way.
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