The UK’s Advertising Standards Authority (ASA) has upheld a complaint made about a press ad that appeared to targeted retirees and encouraged them to invest their pensions in bitcoin.
Cryptocurrency exchange Coinfloor ran an advertisement in the Northamptonshire Telegraph in December 2020 entitled: “There is no point keeping your money in the bank…”
It revolved around a 63-year-old woman who referred to bank interest rates as “insulting”.
“That is why when I received my pension, I put a third of it into gold, a third of it into silver and the remainder in bitcoin.
“To me, bitcoin is digital gold and it has allowed me to take the steps to secure the cash I already have.”
The advert did contain small print at the bottom, stating that ‘investing in cryptocurrencies involves significant risk and can result in the loss of your invested capital’.
‘You should not invest more than you can afford to lose.’
Socially irresponsible
The ASA said the complainant, who believed the advert targeted retirees, challenged whether the ad was misleading, because it failed to make clear the risks associated with bitcoin investments, including loss of capital.
It also failed to mention that neither Coinfloor nor bitcoin were regulated in the UK.
Secondly, the complainant felt the advert was socially irresponsible because it suggested that purchasing bitcoin was a good or secure way to invest savings and/or pensions.
Coinfloor disputed the allegations on the basis that the advert featured a testimonial that included personalised references that reflected the views of the woman featured – not to views of Coinfloor.
The company said it had also included a disclaimer stating that cryptocurrencies involved significant risk and could result in the loss of invested capital, which it considered to be sufficiently prominent.
Insufficient
Despite Coinfloor’s protestations, the ASA upheld the complaint on the following grounds:
- The disclaimer was insufficient to counteract the overall message of the ad that buying bitcoin represented a secure investment, and given the font size and its positioning it had not been presented clearly or prominently enough.
- It appeared in a regional newspaper targeted to the general readership and ASA considered the audience was therefore unlikely to have extensive financial knowledge and experience of the nature of cryptocurrencies and bitcoin and may expect it to be a regulated activity.
- It also directly compared investing savings in bitcoin with the use of regulated services, discouraging consumers from placing their money in banks.
“We therefore concluded that the ad was misleading because it had not made sufficiently clear that the value of bitcoin could go down as well as up, or that the bitcoin market was unregulated in the UK,” ASA stated.
Understanding the risks
Holly Mackay, chief executive of consumer website Boring Money, commented: “Cryptocurrency is a growing part of the financial landscape and our research shows that it is an area of increasing interest for investors.
“Our figures show that 16% of new investors that have started investing in the last year say they hold some cryptocurrency assets, compared to just 6% of all investors overall.
“It also seems to carry a particular appeal for male investors, with men being significantly more likely to say they are open to the idea of investing in cryptocurrency than women.
“Given the considerable risks associated with cryptocurrency, and its appeal to less experienced investors in particular, it is important that all content and promotions are scrutinised carefully. Both firms and investors should take great care to ensure that the risks have been fully understood.”
