The UK Advertising Standards Authority (ASA) has slammed cryptocurrency exchange service Luno for Bitcoin posters.

In a ruling, issued on May 26, 2021, the ASA upheld several complaints against the advertisement.

The problematic ads represented posters for cryptocurrency exchange service Luno, seen across the London Underground and London Buses networks in February 2021. These posters featured a cartoon image of a Bitcoin with text that stated “If you’re seeing Bitcoin on the Underground, it’s time to buy”.

The ASA received three complainants:

• 1. Three complainants, who believed the ad failed to illustrate the risk of the investment, challenged whether it was misleading.
• 2. One complainant challenged whether the ad took advantage of consumers’ inexperience or credulity.

The CAP Code requires that marketing communications for investments made clear that the value of investments was variable and, unless guaranteed, could go down as well as up, and also that significant limitations and qualifications were stated and presented clearly. The ASA understood that initial capital invested in Bitcoin was subject to price fluctuations which could result in both losses and gains in value.

The ASA considered that consumers would interpret the statement “If you’re seeing Bitcoin on the Underground, it’s time to buy” as a reference to buying Bitcoin as an investment.

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.

The body notes that neither Luno nor the Bitcoin market in general was regulated within the UK, and therefore consumers could not seek recourse to services such as the Financial Services Compensation Scheme or the Financial Ombudsman Service.

While the ASA welcomed Luno’s assurance that their future ads would feature risk warnings to consumers, at the time the ad appeared it had not featured any risk warning making sufficiently clear to consumers that the value of Bitcoin could go down as well as up, or that the Bitcoin market was unregulated in the UK. The ASA therefore concluded that the ad was misleading.

Further, the ASA considered that consumers would interpret the statement “it’s time to buy” as a call to action and that the simplicity of the statement gave the impression that Bitcoin investment was straightforward and accessible. For that reason, the body concluded that the ad irresponsibly suggested that engaging in Bitcoin investment through Luno was straightforward and easy, particularly given that the audience it addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies, and was therefore in breach of the Code.

The ASA ruled that the ads must not appear again in the form complained about. The Authority told Luno Money Ltd to ensure that their future marketing communications made sufficiently clear that the value of investments in Bitcoin was variable and could go down as well as up, that Luno Money Ltd and the Bitcoin market were unregulated, and that they did not irresponsibly take advantage of consumers’ lack of experience or credulity by implying that Bitcoin investment was straightforward or accessible.