Cryptocurrency app Luno has fallen foul of the UK’s promoting watchdog for “deceptive” posters displayed at bus and Underground stations in London.
Adverts with the slogan “In case you’re seeing Bitcoin on the Underground, it’s time to purchase” have been ubiquitous in Tube stations and on the aspect of London buses, a tangible signal of the current surge in reputation of cryptocurrencies with retail traders.
However the Promoting Requirements Authority (ASA) stated on Wednesday the adverts underplayed the dangers of investing in unstable and largely unregulated digital belongings like Bitcoin.
The choice on complaints over how cryptocurrencies are marketed to the general public comes as UK monetary regulators are intently eyeing the dangers that digital belongings pose for personal traders.
“We concluded that the advert irresponsibly steered that participating in Bitcoin funding by means of Luno was simple and simple, notably on condition that the viewers it addressed, most of the people, have been more likely to be inexperienced of their understanding of cryptocurrencies,” the ASA stated.
Luno has promoted its platform as a simple and safe possibility for people trying to purchase cryptocurrencies, together with Bitcoin and Ether.
The promoting marketing campaign fashioned a part of a giant push by the London-based firm, which was purchased by the Digital Forex Group final 12 months, to spice up its buyer base within the UK. Fewer than 200,000 of the app’s 7m customers are situated within the UK, the corporate stated in April.
Luno’s marketing campaign bumped into hassle with the promoting business’s self-regulatory physique over complaints that it had “didn’t illustrate the danger of the funding” and “took benefit of customers’ inexperience or credulity”.
Susannah Streeter, senior funding and markets analyst at Hargreaves Lansdown, stated that firms providing cryptoassets to the general public have been coming below rising scrutiny from UK regulators, together with the Monetary Conduct Authority.
The FCA warned in January that traders in cryptocurrencies “ought to be ready to lose all their cash”. The monetary watchdog has additionally banned the sale of cryptocurrency derivatives and exchange-traded notes to retail traders.
“The Promoting Requirements Authority is one other regulator with crypto in its sights, able to censure extra companies in the event that they don’t keep on with strict codes of conduct,” Streeter stated.
In a response printed by the ASA, Luno stated the adverts wouldn’t seem once more in the identical type and that future advertisements would carry threat warnings.
The ASA stated it had advised Luno “to make sure that their future advertising and marketing communications made sufficiently clear that the worth of investments in Bitcoin was variable” and that each Luno and Bitcoin markets weren’t regulated.