Watchdog to review guidance on crypto ads

The self-regulatory body is responding to the growing popularity and increased promotion of businesses that trade in crypto assets, such as Floki, in what is a largely unregulated market.

The ASAI has also begun to field more complaints about crypto ads that do not fully explain the products and services they are promoting – or the risks they might pose to customers.

“The ASAI is considering reviewing whether additional rules and/or guidance is required in light of the emerging trend of cryptocurrency business advertisements,” a spokesperson confirmed to the Irish Independent.

“The ASAI is aware of concerns about consumer knowledge of cryptocurrencies. As well as the general rules on truthfulness, honesty and substantiation, the ASAI code contains rules related to financial advertising.”

Those rules stipulate that advertisers should not take advantage of customer inexperience and should make clear that investments can go down as well as up.

In February the ASAI upheld a complaint about crypto coin Floki, which said the advertiser had not included a warning about the variable value of the asset, forcing the company to take down the ad.

An ASAI review could lead to either updated industry guidance on the code or a change in the code itself.

Recent reviews of social media influencers and mobile phone companies resulted in fresh guidance on existing rules to bring advertisers into line rather than wholesale revisions of the code.

The concern from the advertising world is evidence of a tightening noose around the crypto industry as regulators get up to speed with the fast-evolving world of crypto asset investment and speculation, which has exploded in the last few years.

Last month the CBI issued a warning on the risks of cryptocurrencies amid signs that Russians may be trying to evade financial sanctions by using the digital assets.

The CBI reiterated its recurring message that crypto assets are “highly risky and speculative” and the subject of misleading advertisements and influence campaigns on social media.

Revenue has confirmed it is “updating and expanding” its guidance on the treatment of cryptocurrencies to reduce tax evasion amid a global regulatory clampdown.

Officials are looking at forcing intermediaries – such as exchanges and brokers – to report details of crypto trades, which would make it harder for investors to shield their returns from taxation. Currently, Revenue relies entirely on self-reporting by individuals. Revenue is also looking at resolving questions regarding income and gains on crypto by non-domiciled individuals, as well as ways to tax crypto assets held outside Ireland by Irish residents.

Last month, the UK’s advertising regulator issued an enforcement notice to more than 50 crypto companies warning them against pushing people to buy crypto assets on credit or to exchange more protected assets, such as pension funds, for virtual coins or tokens.