The ASA has issued an "Enforcement Notice" to over 50 companies that advertise cryptocurrencies, "instructing them to review their ads and to ensure they understand and are complying with the rules so that consumers are treated fairly."

In recent months, the ASA published a raft of upheld complaints against ads promoting various crypto related services, with a significant 'uptick' in rulings in December 2021.  At that time, the ASA shifted the goal posts unexpectedly by introducing a new rule that all such ads must include certain information, including the fact that capital gains tax would be payable on investments in crypto (assuming the investor makes a reasonably chunky profit that exceeds their personal allowance of just over £12k in the year they decide to cash in their crypto chips).

The Enforcement Notice provides guidance to the crypto industry on how to stick to the rules and warns that the ASA will monitor for compliance and implement sanctions if they do not see improvements. 

The ASA is concerned that most consumers don’t fully understand how cryptocurrencies work, how volatile they can be, or that they are not regulated - so there is a real risk that people may lose money. 

This is a ‘red alert’ priority issue for the ASA.

The ASA's "guidance" (can it really be called "guidance" if it's mandatory, or would "new rules" be a better description?) requires that crypto ads make clear that: 

  • Cryptocurrencies are unregulated in the UK
  • Cryptocurrency profits may be subject to Capital Gains Tax 
  • The value of investments is variable and can go down as well as up

The Enforcement Notice applies to ads for cryptocurrencies, crypto exchanges and ads or promotions which otherwise involve the transfer, sale or supply of cryptocurrencies, targeted at UK consumers or that are targeted globally on behalf of UK-based advertisers. As we have seen, this can extend to fan tokens and the offer of free crypto.

Prominence of notices

It provides further clarification about the prominence of notices that spell out the above points:

"Digital posters: Qualifications in digital poster advertising must be visible, for example, appearing in a static box. Qualifications that appear only at the beginning of a video are likely to be problematic as they will not necessarily be seen by consumers that pass.

Websites: Qualifications presented at the bottom of a webpage are unlikely to be sufficient. Qualifications should be clearly presented above the fold."

The ASA's requirements and expectations about other media are set out in their Enforcement Notice/"Guidance", which can be accessed here. 

Trivialising investment 

The Enforcement Notice also includes a list of claims/behaviours/activities that have been "prohibited" by the ASA on the basis that they are either "misleading and/or irresponsible because they trivialise investing in cryptocurrency or are likely to take advantage of consumers’ inexperience or credulity".

It says: "The following prohibitions have been established by the ASA as misleading and/or irresponsible because they trivialise investing in cryptocurrency or are likely to take advantage of consumers’ inexperience or credulity..." 

It goes on to provide a list of examples, including: 

Brave New World or less accountability?

As an interesting aside: the wording in the Enforcement Notice is unusual because it strongly suggests the ASA is effectively creating "prohibitions" through its own case law / rulings. This would certainly explain the new rule about CGT, which came from nowhere, but as far as I'm aware the ASA is meant to apply the CAP Code, rather than come up with new rules (admittedly taking advantage of its very wide discretion to apply the spirit as well as the letter of the rules). 

It is CAP that is meant to create new rules, not the ASA, and new rules are only meant to be introduced following a rigorous process of consultation, debate and approval. 

It's not clear if we are in a brave new world where the ASA can make up and enforce new rules (retrospectively) without such scrutiny - certainly something to keep an eye on!

Back to crypto

The ASA says that its notice continues its work in clamping down on problem crypto ads, and that they are "working closely alongside the Financial Conduct Authority (FCA) to take action against those who appear unable or unwilling to abide by the rules."   -it is fair to say that "rules" means "rules and guidance". 

The ASA’s Compliance team will conduct follow-up monitoring and if problem ads persist after 2 May, the ASA has said it will take targeted enforcement action to ensure a level playing field. This will include non-compliant advertisers being reported to the FCA, who are said to have worked closely alongside the ASA in helping to distribute the Enforcement Notice, though it is not clear if the FCA assisted in creating or developing the Enforcement Notice.  


Crypto advertising - latest news: UK and US

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About the author: Geraint Lloyd-Taylor is a partner in, and deputy head of, our leading Advertising & Marketing Law team. Geraint advises a range of advertising agencies, brands, influencers and trade bodies. Read more about his work and how to get in touch with him, here.