AFL's crypto exchange partner Crypto.com has violated UK advertising standards on multiple occasions and has been accused of "misleading" and "irresponsible" behaviour.
UK Advertising Standards Authority rulings may invite further scrutiny of crypto.com promotions in australia
A five year partnership between the AFL and the Singapore-based exchange was announced in January 2022. Crypto.com has since promoted itself in AFL stadiums.
In December, the ASA ruled that a local Crypto.com ad “failed to illustrate the risk of investing in non-fungible tokens”. He also found that the ad did not make it clear that fees would apply.
In response, Crypto.com disputed the ruling, saying that the need to mention fees in the announcement was irrelevant and would "only confuse consumers."
In early 2022, the regulator upheld the rulings on two other ads that were accused of exploiting the “inexperience or gullibility” of consumers.
One read "buy bitcoin with credit card instantly," which the regulator said "took advantage of consumer inexperience and gullibility by failing to make it clear that cryptocurrency gains could be taxed and by strongly encouraging irresponsible investing in cryptocurrencies with a credit card".
Another told consumers they could "earn up to 8.5%," which the ASA found misleading "because the basis for calculating the earnings forecast had not been made clear."
Crypto.com told the regulator that these ads were removed as soon as concerns were raised and that its oversight process had been strengthened.
It is not known if any of these ads were published in the Australian market.
A Crypto.com spokesperson said the company was "trusted by more than 70 million customers worldwide and is the industry leader in privacy, security and regulatory compliance certifications."
The Australian Securities and Investments Commission has called for a regulatory framework for cryptocurrencies and crypto assets like NFTs to better protect consumers. While that plays out, a spokesperson said that the rules on deceptive and deceptive conduct still apply to any type of crypto asset.
"Any firm that is misleading or misleading in its advertising is breaking the law," the Asic spokesperson said.
The regulator took BPS Financial to federal court in October over what Asic says is Misleading and Misleading Claims About Qoin Crypto AssetY Block Earner in November for allegedly offering financial products without an Australian financial services license.
The issues remain before the court. BPS is set to present its defense next month.
Dr. Paul Mazzola, a cryptocurrency expert at the University of Wollongong, said the AFL's partnerships with Crypto.com posed a reputational risk to the sports code.
Mazzola said that Asic could potentially take action if similar announcements were published in Australia.
“Ultimately, Asic would have to demonstrate that the crypto asset being advertised clearly fits within the definitions provided in [Asic rules]which it probably does,” he said.
Mazzola recommended changing the rules to explicitly include cryptocurrencies and NFTs.
“This would clearly send a message to the market and especially to cryptocurrency exchanges like Crypto.com that they need to be careful when framing their advertising and especially include all warnings related to the risks associated with investing in cryptocurrency markets.” .
The AFL was contacted for comment but referred to an earlier statement in November when it said that maintained its partnership with Crypto.com after the collapse of FTXone of the largest cryptocurrency exchanges in the world.
Crypto.com CEO Kris Marszalek rejected comparisons to FTX, saying his company had a "tremendously strong balance sheet."
