AFL partner Crypto.com accused of ‘deceptive’ advertising practices in UK | Cryptocurrencies

The AFL’s crypto exchange partner, Crypto.com, has breached UK advertising standards on multiple occasions and has been accused of “misleading” and “irresponsible” behaviour.

Decisions by the UK Advertising Standards Authority may require further scrutiny of Crypto.com promotions in Australia.

A five-year partnership between the AFL and the Singapore-based stock exchange was announced in January 2022. Since then, Crypto.com has been promoted around AFL Stadium.

In December, the ASA ruled that a local Crypto.com ad “failed to illustrate the risk of investing in non-fungible tokens.” It was also found that the advertisement did not make it clear that fees would apply.

In response, Crypto.com disputed the ruling and said the need to mention the fees in the ad was irrelevant and would “only confuse consumers.”

Earlier in 2022, the regulator upheld the convictions of two other ads that were accused of exploiting the “inexperience or gullibility” of consumers.

One said “buy bitcoin with credit card now,” which the regulator said “exploited the inexperience and gullibility of consumers by failing to make clear that tax can be paid on cryptocurrency gains and irresponsibly encouraging cryptocurrency investment via credit card.” .

Another told consumers they could “earn up to 8.5%”, which the ASA found misleading “as the basis for calculating the earnings forecast was not clear”.

Crypto.com told the regulator that these ads were removed as soon as concerns were raised and that its monitoring process was strengthened.

It is not known if any of these ads ran in the Australian market.

A spokesperson for Crypto.com said the company is “trusted by more than 70 million customers worldwide and is an industry leader in regulatory compliance, security and privacy certification.”

The Australian Securities and Investments Commission has called for a regulatory framework for cryptocurrencies and crypto-assets like NFTs to better protect consumers. While this is being developed, the spokesperson said the rules on misleading and fraudulent behavior still apply to any type of crypto asset.

“Any company that misleads or deceives in its advertising is breaking the law,” spokesman Asic said.

The regulator sued BPS Financial in the Federal Court in October for what Asic said were misleading and deceptive claims about the Qoin crypto asset, and Block Earner in November for allegedly offering financial products without an Australian financial services licence.

Matters remain before the court. BPS will file its defense next month.

Dr Paul Mazzola, a cryptocurrency expert at the University of Wollongong, said the AFL’s partnerships with Crypto.com posed a reputational risk to the sporting code.

Mazzola said Asic could potentially take action if any similar ad was published in Australia.

“Ultimately, Asic should prove that the crypto asset being advertised clearly meets the definitions given under [Asic rules]which it probably is,” he said.

Mazzola recommended that the rules be amended to specifically include cryptocurrencies and NFTs.

“This would send a clear message to the market, and especially crypto exchanges like Crypto.com, that they need to be careful when framing their advertising and specifically include any warnings related to the risks associated with investing in the crypto markets.”

The AFL was contacted for comment but went back on a previous statement in November when it said it stood by its partnership with Crypto.com following the collapse of FTX, one of the world’s largest cryptocurrency exchanges.

Crypto.com CEO Kris Marszalek dismissed comparisons to FTX and said his company has an “incredibly strong balance sheet.”

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