Financial experts are asking the government to empower city regulators to control the amazing growth of high-risk cryptocurrency advertising.
They say that the ads currently on the sides of buses, street signs, and walls of travel networks such as the London Underground give many unproven cryptocurrencies a veneer of unreliability they deserve. I’m afraid. They also attract young people who are often unaware that they are buying untested, unregulated, volatile products.
Former Labor lawmaker Oonagh McDonald has just written a book on cryptocurrencies and regulation. She believes the government must allow the Financial Conduct Authority to crack down on cryptocurrency advertising.
Advertising Drive: Cryptocurrencies are a new type of cryptocurrency that is bought and sold online
She told an email on Sunday: “If the government is serious about strong consumer protection, this issue needs to be addressed quickly. Cryptographic ads should be more transparent and advertise them, including location and contact details. You need to provide the full details of your company.
“They also have to make it clear that they aren’t FCA-approved, that is, people can easily read.” McDonald’s is not a lonely voice. .. Others say that cryptocurrency advertising is essential to be as tightly regulated as advertising for more mainstream (and risk-free) assets such as mutual funds.
Cryptocurrency is a new type of cryptocurrency that is bought and sold online. It is difficult to identify their value, as most are not backed by concrete or realistic ones. As a result, prices are volatile and investors usually make extreme losses or significant profits.
It is also unregulated. This means that if something goes wrong, the investor will not be protected. FCA and Bank of England Governor Andrew Bailey have previously warned that anyone investing in cryptocurrencies should be prepared to lose all their money. However, despite these risks, it is almost impossible to travel through London’s transportation system without encountering new cryptocurrency ads.
For example, a series of ads for a new cryptocurrency called Floki are now scattered on buses, trains, and even elevators. This asset is named after the dog of Elon Musk, the founder of Tesla. Floki is not regulated. In other words, investors are unreliable if something goes wrong. The company’s website does not contain information about where it is based or who is behind it.
Another bot ad promises investors “a smart algorithm for automating crypto investments.”
One of the cryptocurrencies, Afrostar, asks attractively: “The next big cryptocurrency?” The only warning in that ad is a small print. McDonald’s says: “This isn’t enough.”
Some argue that businesses should be able to advertise as they please. In addition, the ad contains a small print disclaimer indicating that cryptocurrencies are not regulated and that the value of your investment may fluctuate.
However, according to FCA research, looking at ads for unregulated cryptocurrencies greatly increases the likelihood that someone will buy them.
In particular, investors who lack knowledge of cryptocurrencies are more likely to be affected by advertising and then at greater risk of regretting their decision to buy.
Susannah Streeter, an analyst at the Wealth Platform Hargreave Lansdown, said: This means that if you invest, you will not be able to protect your financial services compensation scheme in the event of a problem.
She adds: “Given the high risk nature of these assets, I’m also really worried that one in seven people is in debt for a purchase.”
Some investment professionals are afraid that cryptocurrencies will be given the air of legitimacy they do not have by being allowed to advertise with regulated financial products. First-time investors may confuse the two, thinking they are investing for the future when they are buying an unstable cryptocurrency that has not actually been tested.
Connor Campbell is a money expert on the personal finance website Nerd Wallet. He states: “The proliferation of cryptocurrency advertising, which has the same tone as online investment platforms, has helped increase the number of young people attracted to these high-risk products.”
He adds: “From an advertising perspective, we need to do more to protect young and inexperienced investors from the high risks associated with cryptocurrencies. These advertising tones convey a serious aspect of our investment. It is essential. ”Experts are amazed at the fact that cryptocurrencies are more risky than stocks, but their advertising faces much less scrutiny and control.
This is because it is considered risky enough not to be regulated as a financial instrument by the Financial Conduct Authority. If regulated, they will face stricter rules.
Holly Mackay of the candid investment website Boring Money states that advertising rules help companies that offer higher-risk and gambling products than those that offer more mainstream services. “There is a crazy anomaly that makes it difficult for investment providers to advertise what they are doing, without including so many risk warnings. Every time they log on to book a flight, they crash or Imagine facing a warning of a terrorist attack.
She adds: “At the same time, my kids are being hit by ads on gambling sites, and more and more fake product crypto ads are posted on buses and online.” I think it may have resisted some regulations. Doing so will increase their legitimacy. Alex Campbell, Head of Communications for the investment platform Freetrade, believes that all investment ads must comply with the same standards. He states: “Cryptocurrencies are rapidly becoming mainstream, so it’s important for all investment companies to maintain the same advertising standards.”
Andy Russell, CEO of investment platform Wealthify, advises that anyone considering investing in cryptocurrencies should do their homework first. He states:
“There is no risk-free investment. Of course, the stock market goes up and down, but cryptocurrencies are more ups and downs. Therefore, it is imperative that investors conduct research and understand the associated risks.
The Advertising Standards Authority, which oversees advertising, states that crypto assets are an area of ”significant priority.” “We are currently actively monitoring and reviewing a wide range of ads in this sector,” he added.
Floki’s ads are one of the subjects of the survey.
Earlier this year, ASA banned “irresponsible” advertising that encouraged inexperienced investors to buy Bitcoin. Reno, a cryptocurrency platform, told London commuters:
The ASA said the ads are misleading and omit the essential risk warnings.
Transport for London told MoS to ask both FCA and ASA for “clarity.” In addition, he added: ‘Investing in cryptocurrencies is an unregulated industry and TfL confirms that all ads include a disclaimer indicating this at the request of the ASA and FCA. It also requires a disclaimer indicating that the value of the investment may be reduced.
Floki tells MoS: “Regulations are suitable not only for the cryptocurrency industry but also for the financial system.”
Cryptocurrencies: Money, Trust and Regulation, by Oonagh McDonald for £ 25 and can be purchased at Amazon.co.uk or Waterstones.com.
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There are ads everywhere claiming that cryptocurrencies will make you rich
Source link There are ads everywhere claiming that cryptocurrencies will make you rich