Cryptocurrency firms bombarded Londoners with a record number of adverts on public transport during 2021, fuelling calls for a ban to prevent people being lured into risky investments.
The surge in adverts for crypto assets, which are unregulated in the UK, has prompted concerns about the risk of addiction and financial harm, particularly given the wild volatility in the price of digital currencies such as bitcoin, which reached record highs last year before crashing again.
It also emerged that Transport for London (TfL) has not implemented a ban on gambling adverts promised by the mayor, Sadiq Khan, allowing the industry to step up its marketing activity in the meantime.
Records obtained by the Guardian under the Freedom of Information Act show that TfL services displayed 39,560 crypto adverts from 13 firms in the six months between April and September 2021.
Major advertisers include the trading platform eToro, floki – “a “meme coin” named after Elon Musk’s dog – Crypto.com and Luno Money, whose campaign telling people it was “time to buy” bitcoin was banned by the advertising regulator for being “irresponsible”.
The promotional drive eclipsed previous years, as advertisers tapped into the popularity of smartphone trading apps and increased awareness of digital currencies such as bitcoin and ether.
In 2019, the only advertiser offering crypto services on TfL buses and trains was trading platform eToro, which paid for just five digital displays and 40 “supersides”, long posters on the side of doubledecker buses.
Despite widespread working from home in 2020, the volume of crypto ads increased, with companies including Luno Money and Coinfloor buying 1,595 ads between them.
Before the recent surge, 2018 was the busiest year for crypto ads on TfL since it started recording data in 2017.
Even then, 15,000 were shown in 12 months, compared with 39,560 after just six months of 2021, including promotions for relatively obscure firms such as Hex, Kraken, BOTS, and Puglife.
In total, crypto companies have spent £825,245 to advertise on TfL tube and train services since 2018. The organisation does not hold spending data for buses.
A separate freedom of information request by the Guardian revealed that the crypto advertising push was mirrored by a significant increase in gambling ads, as Khan’s April 2021 promise to ban gambling ads appeared to stall.
In 2018-19, online casinos and bookmakers spent £783,476 to advertise on TfL services, then £1m the following year, followed by £1.16m in 2020-21.
But they spent £1.17m in the first three months of the 2021-22 period. While the Euros football championship likely to have fuelled the increase in part, spending was nearly six times higher than in 2018, the year of the last World Cup.
Khan pledged to ban gambling ads in his manifesto, published nearly nine months ago, but a spokesperson for the Mayor’s office said it was yet to be enacted.
Siân Berry, the Green party’s former co-leader, now its London Assembly member, urged Khan to move forward with the ban and extend it to crypto adverts.
“Investment bubbles have always worked by dragging in more and more inexperienced suckers towards the end of the cycle. That’s the stage at which some of these projects may be at with all this public advertising,” she said.
“The risk is that they draw in people who are more likely than not to lose money, which is closely equivalent to gambling and I think these promotions should be banned by Transport for London in the same way.”
“People are struggling at the moment and they may have had blows to their life chances. They may have lost livelihoods or homes and be susceptible to get-rich-quick schemes.”
“Are TfL doing proper checks to establish whether these are legitimate companies?”
A TfL spokesperson said all adverts contained a disclaimer stating that crypto is unregulated in the UK and that the value of investments could fall.
The transport body is vetting ads before they run and is understood to be refusing any that use similar language to those that have been banned or investigated by the ASA. It has written to both the FCA and ASA seeking further guidance.
The managing director of eToro UK, Dan Moczulski, said: “eToro fully supports measures, including regulation, designed to protect and educate investors about crypto and other financial asset classes.”
Asked about the concerns raised about their advertising, several of the crypto firms responded, saying any dangers were well flagged and not unique to crypto assets.
Floki, one of whose adverts is being investigated by the ASA, said banning crypto ads would be “censorship” and that ads should be regulated and include disclaimers.
It also said crypto was “anything but a bubble” and would “change the world as we know it”. Kraken said bubbles “generally don’t last over a decade” with a high degree of adoption by institutions.
BOTS said all investments came with risk and pointed out that the financial crisis of 2008 showed traditional finance wasn’t without dangers.
Luno Money, whose bitcoin advert was banned by the ASA last year, said it would welcome “more formal guidance”, which it hoped would emerge this year.
Credit: news.google.com – Source link