Bitcoin advert banned for telling savers cryptocurrencies are a safe investment

AN AD from Bitcoin exchange Coinfloor has been banned by the advertising watchdog for suggesting buying the cryptocurrency is a secure way to invest.

The Advertising Standards Authority (ASA) said it was irresponsible and didn’t do enough to outline the high risks that come with these kinds of investments.

The Advertising Standards Authority has banned an ad from Bitcoin trading platform Coinfloor

Cryptocurrencies, such as Bitcoin, have soared in value in recent months but investors have been warned they could lose all their money.

Coinfloor, which lets investors buy and sell Bitcoin, took out an ad in the Northamptonshire Telegraph on December 3 that claimed: “There is no point in keeping your money in the bank.”

It featured a woman, aged 63, who was quoted saying interest rates from regulated lenders are “insulting” and describe Bitcoin as “digital gold”.

She adds: “That is why when I received my pension, I put a third of it into gold, a third of it into silver and the remainder into Bitcoin.”

5 risks of crypto investments

THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.

Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
Marketing materials: Firms may overstate the returns of products or understate the risks involved.

The risks were only highlighted in small print at the bottom of the ad.

It read: “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.”

A reader complained to the ASA over fears it failed to make the risks clear and did not mention that the Bitcoin market was unregulated in the UK.

The reader also claimed it was socially irresponsible to suggest that buying the cryptocurrency was a secure way to invest savings or a pension.

Coinfloor argued that all the views expressed in the ad were from the perspective of the featured customer and said there was no suggestion that the customer’s actions were a wise or secure investment.

But the ASA said the disclaimer in the ad was not enough to counter the overall message that buying Bitcoin represented a secure investment.

It said consumers needed to know that Coinfloor and Bitcoin are unregulated and banned the ad from appearing again in its current form.

Obi Nwosu, chief executive of Coinfloor, said the company was disappointed with the decision.

He said: “We will be consulting with the ASA on all future adverts and have offered to start a dialogue to better understand how the Bitcoin industry can correctly educate consumers about the potential of this powerful technology.”

The Northamptonshire Telegraph owner JPIMedia said it would not accept the ad for publication again unless suitable qualifications were used.

It also said it would get a copy of these types of adverts cleared by the Committee of Advertising Practice in the future.