Over 50 cryptocurrency companies have been sent enforcement notices by the U.K.’s advertising watchdog as part of a regulatory crackdown on promotions in the industry.
The Advertising Standards Authority said Tuesday it has told the firms to review their ads and make sure they are in compliance with the rules. It also threatened firms with targeted sanctions if “problem ads” persist after May 2.
This would include reporting non-compliant advertisers to another regulator, the Financial Conduct Authority.
In its notice to the companies, the regulator gave guidance stating advertisers must make clear digital assets are unregulated in the U.K. Firms must not urge people to buy bitcoin or another cryptocurrency in their ads, or create the “fear of missing out” on an investment, the ASA added.
The ASA didn’t name the companies it has contacted, but said it has previously banned ads from the likes of crypto platform Coinbase and pizza chain Papa John’s over concerns they misled consumers.
“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible,” the ASA said in a statement Tuesday.
It comes as Britain takes a tougher line on the crypto industry. The government in January said it would bring crypto ads under the same rules for financial promotions, a move that would require advertisers in the industry to be authorized by regulators.
Regulators have also proposed limiting crypto ads in such a way that consumers may only respond to them if they qualify as high-net-worth individuals or sophisticated investors, a move that has been criticized by industry representatives.
A consultation from the Financial Conduct Authority with the industry on regulation of crypto ads is set to expire on Wednesday.
Global Digital Finance, an industry body that includes crypto exchanges Coinbase and Bitfinex, said it has sent a letter to U.K. Finance Minister Rishi Sunak expressing some concerns.
“Rather than attempting to broaden the scope of existing legislation, stifling the market and attracting unintended consequences, a new bespoke regime should be implemented,” Lavan Thasarathakumar, Global Digital Finance’s director of government and regulatory affairs, said in the letter.
“This regime would include obligations for how cryptoasset promotions should be communicated and more generally would provide clarity on how cryptoasset firms should conduct themselves and how regulators should supervise them.”
Separately, a deadline for crypto firms to be registered with the FCA is set to elapse on Mar. 13. A number of companies, including Revolut and Copper, face the prospect of having to wind down their crypto operations in the U.K. if their application is not approved in time.