Cryptocurrency Ads Reach Record Highs in London Transport | Cryptocurrencies
Cryptocurrency companies bombarded Londoners with record numbers of adverts on public transport in 2021, fueling calls for a ban to stop people being lured into risky investments.
The spike in advertisements for crypto assets, which are unregulated in the UK, has raised concerns about the risk of addiction and financial harm, especially given the wild volatility in the price of digital currencies such as bitcoin , which hit record highs last year before collapsing. again.
It also emerged that Transport for London (TfL) has failed to implement the ban on gambling adverts promised by Mayor Sadiq Khan, allowing the industry to step up its marketing activity in the interval.
Records obtained by the Guardian under the Freedom of Information Act show that TfL services displayed 39,560 crypto advertisements from 13 companies in the six months between April and September 2021.
Major advertisers include trading platform eToro, floki – “a ‘coin’ named after Elon Musk’s dog – Crypto.com and Luno Money, whose campaign telling people it’s ‘time to change’. ‘buying’ bitcoin has been banned by the advertising regulator for being ‘irresponsible’.
The promotional campaign eclipsed previous years as advertisers took advantage of 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 only paid for five digital screens and 40 “supersides”, long posters on the side of double-decker buses .
Despite widespread work from home in 2020, the volume of crypto ads has increased, with companies such as 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 to 39,560 after just six months of 2021, including promotions for relatively obscure companies such as Hex, Kraken, BOTS and Puglife.
In total, crypto firms have spent £825,245 advertising on TfL Tube and train services since 2018. The organization does not hold data on bus spend.
A separate Freedom of Information request from the Guardian found that the push in crypto advertising was reflected in a significant increase in gambling ads, Khan’s April 2021 pledge to ban ads on gambling seems to be stagnating.
In 2018-19 online casinos and bookmakers spent £783,476 advertising on TfL services, then £1m the following year, followed by £1.16m in 2020-21.
But they spent £1.17million in the first three months of the 2021-22 period. While the football Euros probably fueled the rise in part, spending was almost six times higher than in 2018, the year of the last World Cup.
Khan pledged to ban gambling ads in his manifesto, released nearly nine months ago, but a spokesman for the mayor’s office said it had yet to be enacted.
Siân Berry, the former co-leader of the Green Party, now a member of the London Assembly, urged Khan to go ahead with the ban and extend it to crypto advertisements.
“Investment bubbles have always worked by attracting more and more inexperienced suckers towards the end of the cycle. This is where some of these projects may be with all this public publicity,” she said.
“The risk is that they attract people who are more likely than not to lose money, which is roughly equivalent to gambling and I think these promotions should be banned by Transport for London in the same way. “
“People are struggling right now and they may have had their chances in life shot. They may have lost their livelihood or home and are likely to get rich quick.
“Does TfL carry out 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 the value of investments could fall.
The transit agency reviews advertisements before they are shown and is expected to reject those that use language similar to those that have been banned or investigated by the ASA. He wrote to both the FCA and the ASA for further advice.
eToro UK Managing Director 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 that any dangers were well flagged and not unique to crypto assets.
Floki, one of whose ads is being investigated by the ASA, said banning crypto ads would be “censorship” and ads should be regulated and include opt-out clauses. responsibility.
He also said crypto was “anything but a bubble” and would “change the world as we know it.” Kraken said bubbles “usually don’t last more than a decade” with a high degree of institutional adoption.
BOTS said all investments carry risk and pointed out that the 2008 financial crisis showed that traditional finance was not without risk.
Luno Money, whose bitcoin advertising was banned by the ASA last year, said it would welcome “more formal guidelines,” which it hoped would emerge this year.