Leading cryptocurrency exchange, Luno has been mandated by the UK watchdog, the Advertising Standards Authority (ASA), to stop publicizing “misleading” bitcoin ads.
According to a recent report, the regulator noted that it had received several complaints indicating that Luno took advantage of “customers’ inexperience or credulity” by underplaying the risks associated with investing in cryptocurrencies.
The ads in question were featured in the Tube stations and on buses in London earlier this year, with the slogan “If you’re seeing Bitcoin on the Underground, it’s time to buy.”
The ads were launched shortly after Luno was purchased by the Digital Currency Group (DCG) last year, to increase its client base in the UK.
The ASA said,
“We concluded that the ad irresponsibly suggested that engaging in Bitcoin investment through Luno was straightforward and easy, particularly given that the audience is addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies.”
According to the ASA, since these ads were seen at Tube stations and on buses, they could have caught the attention of inexperienced customers, making them believe that investing in bitcoin is a non-risk venture.
The final ruling stated,
” The ad appeared across the London Underground and London Buses networks, which were untargeted media, and was therefore likely to have been seen by consumers who did not have extensive financial knowledge and experience of bitcoin, and would expect that the exchange of bitcoin would be regulated, with legal protection in place for investment activities.”
In response, Luno said that the ads would no longer appear “in the form complained about” and also guaranteed that future ads will come with a risk disclosure.
Regulatory Issues Limit Bitcoin Adoption
Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, noted that the ASA is just one of the many UK regulators cracking down on crypto businesses for lack of regulation.
“On top of being extremely volatile, most cryptocurrencies are unregulated, which not only adds another layer of uncertainty but also means that investors have little or no protection against fraud.”
She noted that cryptocurrencies are not regulated by the UK’s Financial Conduct Authority (FCA), which has often warned investors of the risks associated with digital currencies.
Earlier in January, the financial watchdog had alerted investors that they should be prepared to “lose all their money ” if they invest in crypto.
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Author: Obike Favour