Who: The Advertising Standards Authority (ASA), FC Barcelona, Forix DAX Global Ltd t/a Crypto.com and Turtle United
Where: United Kingdom
When: 21 December 2022
Law stated as at: 17 January 2023
A paid for search-engine ad for a Barcelona Football Club non-fungible token (NFT) being sold at Sotheby’s, featured the text “July 29, 2022 – NFT Johan Cruyff. Don’t miss the live auction. The first NFT Masterpiece of FC Barcelona. Premiere July 29th. Johan Cruyff’s “impossible goal” in 1973. Immortalized and offered as an exclusive NFT”. The text was challenged on whether the ad was misleading because it didn’t make clear:
- the risks associated with NFTs;
- that auction house fees, sales tax and third-party wallet transfer fees applied; and
- that there were significant restrictions on ownership rights.
Barcelona FC did not believe that NFTs were financial projects, so the purchase of an NFT could not be considered an investment. The ASA disagreed. In a similar vein to the Arsenal decision, Barcelona’s ad did not include any risk warnings making consumers aware that the value of investments could vary and that NFTs are an unregulated crypto-asset in the UK.
A paid for social media ad for Crypto.com, a payment and cryptocurrency trading platform, was challenged on whether the ad was misleading because:
- it failed to illustrate the risk of investing in NFTs; and
- it didn’t make clear that fees would apply.
Crypto.com acknowledged that recent guidance did consider NFTs to be crypto assets, but said that the ad only promoted its platform on which NFTs could be purchased and not specific NFTs. The ASA understood this position, but noted that the ad referred not only to collecting NFTs, but also the ability to “mint” and “trade” NFTs
The ad was ordered not to appear again in its current form.
Turtle United NFT
In July 2022, a paid-for social media ad for Turtle United (an NFT project) was challenged on whether the ad was misleading because:
- the ad failed to illustrate the risk of NFT investment;
- it didn’t make clear that past performance or experience does not necessarily give a guide for the future and because the claim “offering a lot of value for its holders” implied the NFTs had an assured significant value; and
- it didn’t state the minting price and that gas fees applied.
Turtle United did not respond to the ASA’s enquiries and its apparent “disregard for the code” concerned the regulator. The ASA upheld the decision and the ad was ordered not to appear in its current form.
Why this matters:
In each case, the ASA stated that marketing communications for investments must make clear that the value of investments are variable and, unless guaranteed, could go down as well as up, and also that significant limitations and qualifications must be stated and presented clearly.
The pitfalls of investing in unregulated crypto-assets must be made clear to consumers or advertisers run the risk of contravening UK advertising rules.