Crypto.com NFT advertising banned in UK

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The UK regulator has banned a Crypto.com ad shared on Facebook. The announcement would have needed to educate opinions on the risks of NFT trading.

The British advertising regulator, ASA, announced its decision on December 21. The ad surfaced on Facebook in July 2022 with instructions guiding potential investors and NFT enthusiasts on how to buy tokens.

According to the regulator, the announcement was misleading. It failed to inform users of the risks associated with NFTs due to high volatility and omitted vital information regarding the gas charges that would apply.

In defense, crypto.com responded to claims that NFTs on the platform were not recognized as financial derivatives. According to the crypto-trading platform, the recent HM Treasury consultation paper excludes NFTs from the range of economic reforms identified by the government.

Crypto.com argues that the ad was strategically marketing the platform and not traded or minted NFTs. Financial knowledge of NFTs did not apply in this case, the company concluded.

UK advertising regulator goes against the FCA

The ASA, however, pointed out that NFTs are volatile digital assets subject to massive price swings and could potentially result in huge losses. For this reason, the regulator argues that a disclaimer was necessary, limiting itself to the term “trade” used in the advertisement because it induces users to buy and sell NFTs in the hope of making a profit. profit.

As a result, Crypto.com should permanently remove the announcement in its reforms or make adjustments to include important information, such as NFT fees and risks.

The advertising ban runs counter to legislation recently published by HMRC which identified NFTs eligible for the investor management exemption. The move came as part of the UK’s strategic plan to elevate the country’s status as a financial hub for offshore investors by encouraging out-of-jurisdiction investment from non-citizens.

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