England: Luno exchange targeted by advertising watchdog

Luno, one of England’s leading cryptocurrency exchanges, has been accused of operating a misleading advertising campaign in London by the British Advertising Standards Authority (ASA).

This comes as the ASA revealed it considers cryptocurrencies a ‘red alert‘ risk for financial mis-advertising, and consequently over the upcoming months crypto firms will become the watchdog’s priority.

“We see this as an absolutely crucial and priority area for us,” said Miles Lockwood, director of complaints at the ASA.

Cryptocurrencies have been brought to the forefront of the watchdog’s attention due to the sensitivities around the promotion of financial products in England.

These strict rules on financial advertising are proposed by the Financial Conduct Authority (FCA). However, cryptocurrencies have posed an issue, falling outside of the current rules and regulations.

The FCA has an uneasy but relatively progressive relationship with cryptocurrencies.

On the one-hand, the regulator has issued warnings in the past that consumers investing in crypto assets “should be prepared to lose all their money”.

This included a joint-warning with the Bank of England (BoE) which highlighted concerns about money laundering.

However, on the other-hand, the FCA has also began moving to make England a cryptocurrency oasis through the creation of a crypto-assets register to licence crypto operations.

Furthermore, in positive comments for the industry, the Bank of England stated that cryptocurrencies were not considered to be traditional money and, therefore, do not represent a systemic risk to the banking ecosystem stability.

Luno in the spotlight

In a series of high-profile advertising placements across London’s public transport system in May, the Luno exchange encouraged members of the British public to invest in Bitcoin (BTC) sooner rather than later.

The advertisement suggested that, if you were there seeing and reading the promotion, then it was time to buy Bitcoin before it became mainstream and too late.

However, the watchdog viewed the adverts as misleading about the accessibility and risk-levels of the digital assets.

In comments to the BBC, the ASA said: “Bitcoin investment [is] complex, volatile and could expose investors to losses… the audience it addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies.”

In a response, Luno’s CEO turned the table to blame the regulator ‘s indecision for teething-problems in the infant industry.

“Honestly, we were under the impression that these ads were okay,” he replied.

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