Crypto advertisers are being pushed into the last chance saloon
By Ian Silvera
The drumbeat is getting louder from Whitehall and Threadneedle Street when it comes to cryptocurrency regulation.
The Bank of England made its own intervention in December, effectively admitting that the UK was behind the pack when it came to a regulatory framework for digital assets.
Now, the Treasury has weighed in, promising to introduce tougher advertising laws for cryptocurrency companies which have been waging a marketing war, often across London’s famous red buses.
The intervention comes after the powerful Treasury Select Committee discussed the matter. Harriett Baldwin, Conservative MP and former JP Morgan banker, told the Financial Conduct Authority (FCA) that cryptocurrency companies shouldn’t be allowed to use words like “invest” or “investment” since it legitimises them.
“The words ‘your investment’ endorse the idea that this is an investment on a par with a FTSE 100 company or a unit trust,” she warned.
It seems the Chancellor, Rishi Sunak, took notice and has published plans to bring the promotion of cryptoassets within the scope of financial promotions legislation.
“We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market,” Sunak declared.
This exercise will be the first foray into how the cryptocurrency industry is treated by the regulators at-large. There are more than 2.3m crypto consumers in the UK, according to the FCA, and they need to be protected.
But this needs to be reasonable and, where possible, limited, to avoid Britain becoming a pariah nation for the cryptocurrency industry and forcing it all underground, with digitally native Gen-Y and Gen-Z getting served up a whole host of dangerous nonsense online.
Beyond the UK, Singapore and Spain are also eyeing up their own moves towards tougher promotion rules. The latter seems to be taking a sensible approach, ordering that “clear, balanced, fair and non-misleading content and information on the risks in a prominent manner” be published on crypto ads.
The Wild West of cryptocurrency advertising is coming to an end.