The Advertising Standards Agency (ASA) has upheld complaints against bitcoin exchange Coinfloor, maintaining that the cryptocurrency firm conducted misleading and socially irresponsible advertising.
Finalising its ruling, the ASA stated that the advertisement in question ‘must not appear again in its current form,’ following an investigation after a complainant argued the advert targeted retirees.
The advertisement, a regional press ad seen in the Northamptonshire Telegraph, featured a headline reading ‘There is no point in keeping your money in the bank,’ and a woman described as being 63 years old, who praised cryptocurrency investment and criticised bank interest rates.
Continuing, the woman featured in the advertisement claimed that when she receives her pension: “I put a third of it into gold, a third of it into silver and the remainder into Bitcoin. To me, Bitcoin is digital gold and it has allowed me to take the steps to secure the cash I already have.”
In its response to the complaint, Coinfloor said that all views expressed were from the perspective of the customer, and not the views of the exchange, emphasised through statements such as ‘to me’.
The firm asserted that the purpose of the ad was to bring a customer’s personal story to public attention, and also reiterated that a disclimarer had been inserted, which read in small print “Investing in cryptocurrencies involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose”.
In its assessment of the complaint, the ASA concluded that the first accusation – of misleading advertising – was accurate, and that the advertisement was in violation of the CAP Code requirement that marketing for investments must clearly state that the value of investments is variable.
Additionally, the ASA stated that Coinbase had not highlighted the fact that Bitcoin is an unregulated commodity in the UK, and placed the advertisement in a regional newspaper with an audience unlikely to have adequate financial knowledge.
The second complaint of social responsibility was upheld on the basis that the advertisement ‘made various references to the investment of savings in Bitcoin,’ promoting this course of action as a secure investment, despite the possibility that it may diminish in value, whilst savings investments with banks do not.
Furthermore, the ASA believes that although the advertisement uses a personal story, the fact that it featured on a Coinfloor advertisement would lead customers to assume it represented the views of the company.
Concluding its assessment, the ASA stated that it had informed Coinfloor that all future marketing campaigns must make it clear that: “The value of investments in Bitcoin was variable and could go down as well as up, that Coinfloor Ltd and the Bitcoin market were unregulated, and that they also did not irresponsibly suggest that purchasing Bitcoin represented a secure investment of one’s savings or pension.”