Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
An ad for cryptocurrency investment firm Cryptobank, appeared in the 30 April 2018 edition of a regional newspaper. Text in the ad stated "bitcoin to hit £30,000 in 2018! FREE CENTRAL LONDON SEMINAR ... There are more millionaire's [sic] being made from Bitcoin faster than anything in history. DON'T miss your chance AGAIN! Come to our FREE London Seminar and learn how you can make money in Bitcoin".
Issue
Barclays Corporate Banking challenged whether:
1. the claim “bitcoin to hit £30,000 in 2018” was misleading; and
2. the ad was misleading, because it did not make clear that bitcoin was an unregulated financial product.
Response
1. & 2. Inside Access LLC acknowledged receipt of the complaint but did not provide a substantive response.
Assessment
The ASA was concerned by Inside Access LLC t/a Crypto Bank Global’s lack of response and apparent disregard for the Code, which was a breach of the CAP Code (Edition 12) rules 1.7 1.7 Any unreasonable delay in responding to the ASA's enquiries will normally be considered a breach of the Code. (Unreasonable delay). We reminded them of their responsibility to provide a substantive response to enquiries and told them to do in future.
1. Upheld
We considered that, whilst some consumers might have a degree of knowledge concerning cryptocurrencies, most were unlikely to be familiar with the workings, and therefore the associated risks of cryptocurrencies such as Bitcoin. We considered that those consumers would understand that the ad related to a seminar for a form of financial investment.
We considered that consumers were likely to understand from the claims “bitcoin to hit £30,000 in 2018”, “Think Bitcoin has peaked? …Wrong!” and “There are more millionaire's [sic] being made from Bitcoin faster than anything in history” that the value of the cryptocurrency would significantly increase in 2018 (potentially reaching 1 Bitcoin to £30,000) and any investment was guaranteed to yield rapid and significant profit.
We understood that the investments of cryptocurrencies were speculative, and that the value of Bitcoin was subject to significant fluctuations and was not guaranteed. That meant its value could decrease, as well as increase, at any given time. Notwithstanding that the ad was for a seminar about investment in Bitcoin, because we understood that Crypto Bank Global offered services that facilitated investment in cryptocurrencies, we considered that the potential risk of fluctuation in the value of Bitcoin to be material information that consumers required in order to make an informed decision about the seminar.
Because the ad implied that the value of Bitcoin would continue to rise significantly in 2018 and that rapid and substantial investment return would be guaranteed, and that the ad did not make clear that the value of Bitcoin could go down, as well as up, we considered that the ad was misleading.
On that point, the ad breached CAP Code (Edition 12) rule
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising).
2. Upheld
Because we considered that most consumers would not have extensive knowledge about the nature of cryptocurrencies and Bitcoin, we considered that they would expect the investment in Bitcoin to be regulated, and that there would be legal protection in place for related investment activities.
Bitcoin was not currently regulated within the UK and consumers could not therefore seek recourse to services such as the Financial Services Compensation Scheme or the Financial Ombudsman Service. For those reasons, we considered the fact that Bitcoin was currently unregulated, to be material information that consumers required in order to make informed decisions about the seminar, and therefore should have been made clear in the ad. Because it was not, we concluded that the ad was misleading.
On that point, the ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising).
Action
The ad must not appear again in the form complained of. We told Crypto Bank Global to ensure that future ads did not misleadingly imply that the value of Bitcoin, or any other cryptocurrencies, would rise significantly, and that fast and substantial investment returns would be guaranteed. We also told Crypto Bank Global to ensure that those ads also made clear that the value of Bitcoin, or any other cryptocurrencies, could go down as well as up, and that it was an unregulated financial product.
