Who: The UK Advertising Standards Authority (ASA), Eve and Jessica Gale (the Gale twins), Elizabeth O’Donnell (O’Donnell).
Where: United Kingdom
When: 7 September 2022
Law stated as at: 10 October 2022
The ASA has upheld complaints against influencers, the Gale twins, for social media posts irresponsibly promoting cryptocurrency investment in breach of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code).
Each of the Gale twins posted to social media that they had been “introduced” to O’Donnell who “works in crypto”. Jessica Gale explained that the “world of crypto” is a “super quick, easy way of making extra money from your phone” and that she knew “nothing about crypto” before meeting O’Donnell, but that O’Donnell’s services were “so safe and easy“. Eve Gale wrote that O’Donnell “teaches you guys how to make money…in such an easy way”. Each of the Gale twins’ posts were labelled as an advertisement.
In response to the ASA’s challenge to the ads, the Gale twins’ management stated that it was the Gale twins’ first time (and would be their last time) promoting cryptoassets. O’Donnell had approached the sisters asking them to promote O’Donnell’s page as a helpful source of information. The Gale twins had also understood their ads to prompt viewers to visit O’Donnell’s page for further information about cryptoassets, rather than directly influencing viewers to invest. O’Donnell did not provide a substantive response.
The ASA acknowledged the Gale twins’ explanation that they believed they were not promoting an investment service, but noted that O’Donnell’s page contains posts stating “Trades Available” and listing amounts in dollars corresponding to “return” amounts. The ASA held, on balance, the Gale twins were promoting investment in cryptoassets.
The ASA also thought that the Gale twins’ audience would likely interpret the sisters’ references to O’Donnell’s services as being “super quick” and “easy” as meaning that investment in cryptoassets was simple and risk free. Ultimately, the ASA held that the ads were irresponsible and therefore breached the CAP Code. The ASA also concluded the ads breached the CAP Code on the bases that they failed to include warnings about the volatility and unregulated nature of cryptoasset investing in the UK and to warn consumers that capital gains tax could be payable on profits from investing.
Why this matters:
While cryptoassets are increasingly accessible for consumers, the ASA is of the view that they remain highly complex and volatile. So, the ASA expects advertisers and influencers to ensure that advertisements do not trivialise cryptoasset investing and do not take advantage of consumers’ inexperience and credulity.
This means carefully vetting any promotions for cryptoasset investing – this is particularly the case for “lifestyle” influencers like the Gale twins with audiences unlikely to understand the complexities and risks involved in cryptoasset investing.
This is not a UK-specific issue. Kim Kardashian recently paid US$1.26m after being charged by the US Security and Exchange Commission with unlawfully promoting a crypto investment scheme on social media (by failing to sufficiently disclose the nature, source, and amount of compensation she received in exchange for the promotion).