Who: The Advertising Standards Authority (ASA), FanCraze Technologies Inc and Essex County Cricket Club
Where: United Kingdom
When: 15 November 2023
Law stated as at: 29 January 2024
What happened:
The ASA has upheld a complain made against Essex County Cricket Club (CCC) in relation to a social media post which promoted cryptoassets for FanCraze Technologies.
Essex CCC published a social media post advertising non-fungible tokens (NFTs) with a link to the FanCraze website. The ASA challenged whether the ad was obviously identifiable as a marketing communication. A complainant challenged whether the ad was misleading because it did not make clear that it was referring to an investment product and it failed to illustrate the risk of the investment.
When challenged, Essex CCC indicated that they had a partnership with FanCraze in which they promoted digital collectables. They acknowledged that the social media post was a marketing communication and apologised for failing to disclose it as such. The club deleted the post and indicated that they would ensure that all future ads were compliant with the ASA rules.
The regulator also considered whether the ad made clear which cryptowallet a prospective buyer would need in order to receive a token and which blockchain the tokens operated on. It was therefore misleading. FanCraze responded to say that consumers could only use credit cards, debit cards and bank transfers to purchase NFTs on its platform. While this was noted by the ASA, because the ad did not make consumers aware that a FanCraze wallet was required to purchase the NFTs (and that they existed on a blockchain) the regulator concluded that the ad was misleading.
The ASA upheld all of the complaints against the post and both parties were told the ad must never appear again in its current form.
Why this matters:
On 8 October 2023, the Financial Conduct Authority (FCA) took over from ASA in respect of the regulation of technical claims in ads for most crypto assets in non-broadcast media.
Cryptoassets have become increasingly popular in the UK and there is a general feeling that a lot of the terminology used in ads for these products will be new and confusing to a lot of consumers, increasing the risk of misleading advertising.The new rules will not cover cryptoassets which are “non-fungible”; for example, NFTs, as advertised in Essex CCC’s social media post, or “limited payment tokens” that h can be redeemed and used for the payments of goods and services such as non-monetary customer loyalty points.
The ASA will continue to work with the FCA where needed, as it remains the regulator of all finance-related broadcast advertising in Ofcom-regulated TV and radio services. The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) will still apply to the “non-technical” aspects of ads for products by an FCA-regulated business, that is those claims that do not relate to specific characteristics of the product.
The CAP Code requires that marketing communications for investments made clear that the value of investments was variable and, unless guaranteed, could go down as well as up, and also that significant limitations and qualifications were stated and presented clearly.
