HomeCryptoAFL Partner Crypto.com Accused of ‘Deceptive’ Advertising Practices in UK | Cryptocurrencies
AFL Partner Crypto.com Accused of ‘Deceptive’ Advertising Practices in UK | Cryptocurrencies
January 8, 2023
The AFL’s cryptocurrency exchange partner, Crypto.com, has breached UK advertising standards on multiple occasions and has been accused of “misleading” and “irresponsible” behaviour.
Rulings by the UK Advertising Standards Authority (ASA) may require further scrutiny of Crypto.com promotions in Australia.
A five-year partnership between the AFL and the Singapore-based exchange was announced in January 2022. Since then, Crypto.com has been promoted across AFL stadiums.
In December, Asa determined that a local Crypto.com advertisement “failed to illustrate the risk of investing in non-fungible tokens (NFTs).” She also found that the announcement didn’t make it clear that fees would apply.
In response, Crypto.com disputed the ruling and said the need to mention fees in the ad was irrelevant and would “only confuse consumers.”
In early 2022, the regulator upheld rulings on two other ads accused of exploiting consumers’ “inexperience or gullibility.”
One of the ads read “buy bitcoin with credit card instantly,” which the regulator said “taken advantage of consumers’ inexperience and gullibility by not allowing clear taxes to be paid on cryptocurrency profits.” and irresponsibly encouraging cryptocurrency investment on a credit card”.
Another ad told consumers they could “earn up to 8.5 percent,” which Asa considered misleading “because the basis for calculating the earnings forecast was not clarified.”
Crypto.com told the regulator these listings were removed as soon as concerns were raised and that its oversight process was tightened.
It is unknown if any of these ads ran in the Australian market.
A Crypto.com spokesperson said the company has been “trusted by more than 70 million customers worldwide and is an industry leader in regulatory compliance, security and privacy certifications.”
The Australian Securities and Investments Commission (ASIC) has called for a regulatory framework for cryptocurrencies and cryptocurrencies such as NFTs in order to better protect consumers. While this is under development, a spokesperson said the rules on misleading and deceptive conduct still apply to any type of cryptocurrency.
“Any company that misleads or misleads in its advertising breaks the law,” the ASIC spokesman said.
The regulator took BPS Financial to federal court in October over what Asic claims is misleading and deceptive about crypto asset Qoin, and Block Earner in November for allegedly offering financial products without an Australian financial services licence.
The issues remain before the court. BPS is set to file its defense next month.
Dr. Paul Mazzola, a cryptocurrency expert at the University of Wollongong, said AFL partnerships with Crypto.com present a reputational risk to the sports code.
Mazzola said Asic could potentially take action if similar announcements were made in Australia.
“Eventually, Asic should demonstrate that the advertised crypto asset clearly falls within the definitions provided in [Asic rules]which it probably does,” he said.
Mazzola recommended changing the rules to explicitly include cryptocurrencies and NFTs.
“This would clearly send a message to the market and in particular to cryptocurrency exchanges such as Crypto.com that they need to be careful when framing their advertising and especially include all warnings regarding the risks associated with investing in the cryptocurrency markets.”
The AFL was approached for comment, but referred to an earlier statement in November that it maintained its partnership with Crypto.com following the collapse of FTX, one of the largest cryptocurrency exchanges in the world.
Crypto.com CEO Kris Marszalek rejected comparisons to FTX and said his company had an “extremely strong balance sheet.”