Red alert on crypto advertising

Crypto currencies have been around since 2009, with Bitcoin believed to be the first ever created. It is now thought that about 5% of the UK population (Broker Chooser) have a crypto currency asset, the highest level of investment in Europe.

Advertising is helping fuel the growth, with the digital space – and social media in particular – proving to be fundamental in the promotion of crypto trading. In January 2022 the government unveiled plans to crack down on misleading cryptocurrency ads by making them subject to the same rules on financial promotions as for other high-risk investments. The Treasury said that the aim was to strike a balance between growth and consumer protection.

Rishi Sunak, UK Chancellor, said: ‘Crypto assets can provide exciting new opportunities offering people new ways to transactions and investment. But it’s important that consumers are not being sold products with misleading claims. We are ensuring that customers are protected, while also supporting innovation of the crypto asset market.’

The Advertising Standards Authority (ASA) has exercised its part in protecting customers, clearly demonstrating that the crypto advertising area is a ‘red alert’ priority for them. At the end of 2021 the ASA published an unprecedented seven rulings concerning breaches of the UK marketing rules, in particular the CAP Code by companies involved in the promotion of cryptocurrency assets. All the rulings covered seven different advertising channels in the digital space and provide useful guidance on the watchdog’s expectations for advertisers. The published rulings had two common aspects: the adverts (except Papa John’s) were found to be misleading because they failed to sufficiently illustrate the risk of investment in cryptocurrency (Rules 3.1 and 3.3 of the CAP Code); and all advertisers were socially irresponsible because their adverts took advantage of consumers’ inexperience or credulity (Rules 1.3 and 14.1 of the CAP Code).

Kelsey Farish, from DAC Beachcroft’s specialist blockchain and cryptoasset team, sets out some key takeaways for companies involved in crypto market, together with summaries of the rulings.

  • Responsibility. Irrespective of the advertising medium, it is the promoter who bears the main responsibility of complying with the CAP and the BCAP rules. Accordingly where a promoter is at an ‘arm’s length’ in a promotion (eg where it is run through an influencer or organised by a marketing agency) the promoter should ensure its contracts contain the necessary protections.
  • One click away? The ‘one click away’ rule mandates that not all terms and conditions of a promotion need to be included in an advert, as long as there is a reference to a source which contains them. To make use of this rule, the terms should really be ‘one’ click away, especially where they are considered to be key. Consider using disclaimers in your Twitter or Facebook cover photos to include key terms and conditions relevant to your service or goods.
  • Consumer sophistication. When targeting consumers interested or trading with cryptocurrencies (and other blockchain technology such as NFTs), advertisers should not imply that those targeted individuals are in any way more sophisticated in the subject matter than the general public.
  • Jurisdiction-specific issues. Where a campaign targets the users in a specific geographical market, the terms and conditions should contain market-specific disclaimers, for example the applicability of certain taxes.
  • Platform and transaction fees. The fees applicable to crypto trading, including transaction and exchange fees, are likely to be considered ‘key terms’ and should be included in all marketing materials.
  • Legal advice. Always seek legal advice when using terminology implying or stating that your business is ‘regulated’. DAC Beachcroft has extensive experience advising entities in niche financial regulatory matters involving the FCA and other authorities, and our specialist blockchain and cryptoasset team advises on the full spectrum of issues related to cryptocurrency, NFTs, and smart contracts, including advertising.
Some points raised in the individual decisions
  • The fact that some consumers may have an interest in cryptocurrency in general did not automatically mean that they had more knowledge or experience with cryptocurrencies than the general public.
  • Lack of reference to the fact that capital was at risk or that Capital Gains Tax (CGT) could be paid on cryptocurrency profits, which would have been unknown to the general public.
  • Lack of reference that fees for buying and selling cryptocurrency were applicable.
  • Lack of time to comprehend the disclaimer in full.
  • Social irresponsibility in taking advantage of consumers’ inexperience or credulity, and trivialising investments in cryptocurrency.
  • Misleading claims that regulation, in the context of an ad for a cryptocurrency product, would mean that the company and the specific cryptocurrency services they advertised were regulated by the FCA.
  • Lack of clarity that past performance or experience did not necessarily give a guide for the future. This falsely implied a guaranteed income and was also ruled to be misleading to consumers.

DAC Beachcroft’s technology and media lawyers advise some of the world’s leading businesses in this sector, and the team has a breadth of expertise in the cryptocurrency and NFT advertising space.

For more information on DAC Beachcroft’s cryptocurrency and NFT legal advisory offering, or in respect of advertising law and regulation, please contact Tim Ryan ( or Kelsey Farish (