The UK’s Advertising Standards Authority (ASA) has ruled against advertisements by Crypto.com and Turtle United for their non-fungible token (NFT) promotions.
The ASA determined that both companies did not adequately outline the risks of investing in NFTs or fully display transaction fees, according to its Dec. 21 ruling on Foris DAX Global and Turtle United NFT.
The decision concerns paid Facebook ads for both companies that ran in July. While the ASA’s ruling is only a warning, the regulator has instructed both companies not to run the advertisements in the same format again.
The ASA previously announced its intention to increase oversight of cryptocurrency advertising and introduce new protections for consumers. In January, the ASA also reprimanded Crypto.com for two advertisements that “failed to illustrate the risks of the investment, were irresponsible and took advantage of consumers’ inexperience or credulity.”
Crypto.com argued that the NFTs available on its platform, including art and sports collectibles, were not financial in nature and therefore should not be subject to financial rules set forth by the ASA’s code. The company argued that NFTs were excluded from recent Treasury consultation papers on cryptocurrencies, and therefore believed they would be exempt from requirements to clearly state that profits from cryptocurrencies are subject to capital gains tax and are unregulated. However, the ASA upheld the complaint.
Turtle United did not respond to the ASA’s complaint, and the regulator determined that the company did not make it clear that past performance or experience does not necessarily indicate future outcomes. The ASA also said that Turtle United claimed to “offer a lot of value” for its NFT holders, implying that the NFTs had a guaranteed significant value. Turtle United’s current floor price is approximately $24, according to OpenSea data, with a mint price advertised at 0.2 ETH plus transaction fees.
This is not the first time that the ASA has taken action against companies operating in the cryptocurrency space. Back in March, the regulator issued an Enforcement Notice to more than 50 Bitcoin-related (BTC) businesses, mandating them to review their ads or get reported to local financial regulator Financial Conduct Authority (FCA).
Also in March, the ASA has banned a bitcoin ad by cryptocurrency exchange, Coinfloor, for misleading a particular target audience.