Crypto.com

The Advertising Standards Authority in the U.K. has banned a Crypto.com Facebook ad that promoted investments in non-fungible tokens that the regulator said failed to illustrate the risks of investing in NFTs, in violation of its advertising code.

We understood that NFTs were a volatile cryptoasset, subject to frequent change and one that could potentially lead to large losses. Because the ad did not include any risk warning making consumers aware that the value of NFTs could go down as well as up, or that they were an unregulated cryptoasset we concluded that the ad was misleading.

The ASA also found that the ad, which plugged the platform’s app, did not make clear that if investors wanted to mint or trade NFTs, they would be charged a fee.

The ASA decision comes after TINA.org in August sent notification letters to a number of A-list celebrities promoting NFTs on social media.

The letters informed the celebrities that if they have a material connection to the NFT companies they are promoting, such as a business relationship, that connection (along with the risks associated with investing in speculative assets like NFTs, the financial harm that can result from such investments and the personal benefit they may gain by virtue of the promotion) needs to be clearly and conspicuously disclosed in the endorsement as required by FTC law.

Separately, some of those celebrities are now facing lawsuits in connection with their endorsements of the now-defunct crypto exchange FTX, whose founder is accused of defrauding customers and investors of billions of dollars.

Find more of our coverage on NFTs here.