Crypto.com, the official cryptocurrency exchange partner for the AFL, has failed to comply with the UK advertising standards. The exchange is being accused of engaging in misleading and irresponsible advertising.
Crypto.com fails to comply with UK advertising practices
The ruling by the UK Advertising Standards Authority could attract more scrutiny over the promotions made by Crypto.com in the country. Crypto.com secured a five-year partnership deal with the AFL. The deal announced in January 2022 has seen Crypto.com being promoted in AFL stadiums.
In December, the ASA ruled that a local advertisement by Crypto.com did not highlight the risks of investing in non-fungible tokens (NFTs). The exchange also failed to disclose the fees charged on these investments. In its response, Crypto.com said that it did not mention fees, as these would confuse customers.
In another advertisement, Crypto.com urged investors to “buy Bitcoin with credit card instantly. However, according to the regulator, the ad failed to mention taxes paid on crypto profits. The ad was also irresponsible in encouraging investing in crypto using a credit card.
ASA also said that another ad where Crypto.com encouraged customers to invest in an up to 8.5% earn program was misleading as the exchange failed to show how it arrived at this earn amount. According to Crypto.com, the ads were taken down as soon as the regulator raised its concerns.
Global regulators have been expressing concerns over the advertisements run by crypto firms. Given the highly volatile nature of the cryptocurrency industry, many regulators have mandated companies offering crypto-related services to disclose the amount of risk involved before investing.
Crypto.com’s partnership with the AFL
Crypto.com is among the exchanges that have invested heavily in the sports industry. The exchange has secured multiple large deals, the latest being with FIFA for the 2022 Qatar World Cup.
Nevertheless, these deals risk the reputation of sports organizations when their crypto sponsors are under regulatory scrutiny. A crypto expert at the University of Wollongong, Dr. Paul Mazzola, said that the partnership between the AFL and Crypto.com posed a reputational risk for the sporting industry.
Mazzola recommended that for a crypto asset to be advertised, it needs to fit within the definitions provided by regulators. He also noted that advertisement rules be changed to that they include cryptocurrencies and NFTs.
According to Mazzola, having these guidelines in place would ensure that cryptocurrency exchanges were careful in coming up with advertisements. These exchanges will also be mandated to include a warning of the risks associated with investing in the crypto market.
However, the AFL has stood firm in its decision to partner with Crypto.com. In November, after FTX’s collapse, AFL said it would continue with its partnership with Crypto.com. The collapse of FTX, once one of the largest cryptocurrency exchanges, dented confidence in the market. Crypto.com’s CEO, Kris Marszalek, said that his company was not like FTX and was in a solid financial position.
FightOut (FGHT) – Newest Move to Earn Project
- CertiK audited & CoinSniper KYC Verified
- Early Stage Presale Live Now
- Earn Free Crypto & Meet Fitness Goals
- LBank Labs Project
- Partnered with Transak, Block Media
- Staking Rewards & Bonuses