Crypto exchange Crypto.com had a Facebook ad banned by the U.K.'s Advertising Standards Authority (ASA), falling foul of the industry's self-regulatory organization for the second time this year.
The ad for Crypto.com NFT was seen on the social media platform in July. NFTs, or non-fungible tokens, are unique tokens on the blockchain tied to real-world assets. The ASA took issue with the ad because it did not illustrate the risk of investing in NFTs and didn’t make clear that fees would apply, it said Wednesday.
In January, the ASA banned two of the company's ads, saying they were considered to be misleading and irresponsible, taking advantage of consumers’ “inexperience or credulity” and failed to make clear that crypto investments aren’t regulated in the U.K. Crypto.com received Financial Conduct Authority (FCA) approval to operate in the country in August.
"Because the [Facebook] ad did not include any risk warning making consumers aware that the value of NFTs could go down as well as up, or that they were an unregulated crypto asset we concluded that the ad was misleading," it said. "We told Foris DAX Global Ltd t/a Crypto.com that their advertising must make clear the risks of NFTs ... . They should also not omit material information regarding fees and charges on their platform."
In a submission to the authority, the exchange pointed out that the ad was no longer live and that it promoted the trading platform, not a specific NFT. Therefore, it said, "it would be unreasonable to request that the specific ad include limitations or qualifications regarding the risk of investing in NFTs," according to the ASA's statement. Further, the ad referred to only to buying NFTs, which are fee free, and so "the need to mention fees in the ad was not relevant and any qualification would only confuse consumers."
Crypto.com declined to comment further than the responses in the report.
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