Adverts for the crypto token Floki Inu, which were splashed across London’s public transport network last autumn, breached UK advertising standards, an investigation by the ads watchdog has found.
The UK's Advertising Standards Authority (ASA) said that the ads, which featured the slogan "Missed Doge? Get Floki" and a cartoon dog mascot "exploited consumers' fears of missing out ... trivialised investment in cryptocurrency and took advantage of consumers' inexperience or credulity".
The ads campaign by Floki Inu, which is named after Elon Musk’s pet dog, became a flash point for objections to the widespread advertising of crypto tokens and exchanges in the UK, with several London elected officials calling for ads on public transit to be banned.
Advertisements for Floki Inu also featured heavily on Dublin public transport late last year.
In a response published by the ASA, Floki Inu said it had included a risk warning and checked the ads with the Committee of Advertising Practice, the organisation responsible for writing UK ads rules, and been told they were in line with standards.
Floki said it had done “everything in [its] power to comply” with ads rules at the time, and that the ASA was unfairly applying changes to its guidance retrospectively.
Advertising of crypto investments has become a key focus for regulators in jurisdictions around the world, as watchdogs fret about the risk that consumers will be tempted into risky coins and lose money. Spain, Italy and Singapore have all tightened standards on crypto promotions this year.
The ASA has also taken crypto exchanges to task for what the agency called “widespread” problems with misleading and irresponsible ads, issuing rebukes to seven firms in December, including eToro and Coinbase.
Less strict rules
Crypto ads had proliferated in part because they were subject to less strict rules than promotions for regulated financial products such as stocks and funds.
The UK Treasury in January said it would seek to change the law to give the Financial Conduct Authority oversight over most cryptocurrency promotions and bring them "in line with the same high standards that other financial promotions such as stocks, shares and insurance products are held to".
Floki Inu attracted particular attention because the promoter of the coin refused to identify itself while soliciting investment from the public. The token’s backers funded their ad blitz with a “marketing fee” of 4 per cent on buyers, an approach also taken by some other coins.
The ASA said: “We corresponded with Floki Inu’s lawyers, who confirmed that the advertiser was based in Georgia (the US state).” The regulator added that it had told Floki not to repeat the ads, but its rebuke carries no penalty for the crypto group. – Copyright The Financial Times Limited 2022
