The U.K advertising regulator has banned an advertisement by the cryptocurrency exchange Coinfloor aimed at pensioners, on the grounds that it was misleading.
Coinfloor is the Uk’s longest running Bitcoin exchange, and has previously marketed itself on being a trustworthy, verified exchange. The Bitcoin ad suggested that Bitcoin would be a good way to invest savings or pensions, however it failed to mention the risks involved. While this advertisement ban may be a reflection of the lack of foresight by Coinfloor, it is also an example of the hazy view with which the government regards crypto-assets, as well as the lack of clarity in cryptocurrency regulation.
The Advertising Standards Authority banned Coinfloor from releasing the advertisement in its current form, citing a complainant who questioned whether the ad was misleading and socially irresponsible for failing to make clear the risks associated with Bitcoin.
The ASA commented in their statement:
“We told Coinfloor to ensure that future marketing communications made sufficiently clear that the value of investments in bitcoin was variable and could go down as well as up, that Coinfloor and the bitcoin market were unregulated, and that they also did not irresponsibly suggest that purchasing bitcoin represented a secure investment of one’s savings or pension,"
Coinfloor responded to this by stating that all views in the ad were from the perspective of the customer who was featured, and did not represent Coinfloor’s views.
While the Bitcoin advert may be marked as irresponsible by the Uk regulatory body, without a clear regulatory framework in place it is difficult for crypto-based bodies to navigate the murky waters. The volatility and complexity of cryptocurrency makes it difficult to regulate, however the growing demand for cryptocurrencies makes clear regulation a pressing issue.
The future of cryptocurrency in the U.K, is still unclear and U.K policy is still developing. While some regulation is loosely in place, there are still many elements of regulation that need to be addressed. The chancellor of the exchequer recently announced in this year's budget announcement that there would be a freeze on any capital gains tax for the next five years, which includes Bitcoin holders.
Once a more thorough regulation has been implemented, Bitcoin is likely to become more widespread in the U.K, and in Europe. As it currently stands, last year the European Union implemented a new money laundering law, which the U.K also decided to implement, known as the EU Fifth Anti-Money Laundering Directive (5AMLD) which requires cryptocurrency platforms and wallets to identify their customers.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.