There have been significant talks about regulating the crypto sector, and authorities are already putting a strict eye on the segments of the sector. In the United States, regulators are closely monitoring advertisements relating to cryptocurrencies.
Juliana Gruenwald, the U.S. Federal Trade Commission (FTC) spokesperson, briefed a publishing house on the organization’s approach to advertisements in the sector. FTC is an independent agency of the United States government whose principal mission is to enforce civil antitrust law and promote consumer protection from deceptive or unfair business practices through law enforcement, research, and education.
In her media interaction, Gruenwald said that the organization is investigating several firms over possible misconduct relating to digital assets. However, the executive didn’t provide the details of the firms that have been inspected or have triggered the inspection.
The possible misconduct mentioned by the regulator here refers to the deceptive and misleading advertising and promotion relating to crypto. Deceptive advertising and marketing have been a significant concern for the nation this year.
Earlier in October this year, global celebrity Kim Kardashian was made to pay a heavy fine by the U.S. Securities and Exchange Commission. Reportedly, she got $250,000 for promoting EthereumMax but failed to report it to the authorities.
As per the SEC’s ruling, Kim broke the anti-touting clause of the federal securities laws. She has agreed to pay $1.26 million in fines to break the law and settle things with the SEC. The $1.26 million is a collective amount that includes the $250,000 she received for promoting EMAX tokens, prejudgment interest, and a $1 million penalty.
Reportedly, in November, National Football League (NFL) quarterback Tom Brady and National basketball association (NBA) point guard Stephen Curry were also under probe by Texas financial authorities regarding their promotion of the currently-bankrupt firm FTX.
At the beginning of this year, FTC also issued warnings about a well-known crypto scam with three essential features, i.e., an impersonator, a Q.R. code, and a crypto ATM where all the targets would be directed to send funds.
According to a report published by the organization in June, nearly half of the total crypto-related scams started from social media platforms in 2021. Over the past year, almost $1 billion in crypto has been lost to scammers.
However, the U.S. is not the only country focusing strictly on advertisements. Several countries globally have been concerned with the growing use of deceptive advertisements to trap investors. The regulators and enforcement agencies from institutions worldwide are trying to keep a check on deceptive crypto marketing.
In March this year, the U.K.-based Advertising Standards Authority (ASA), a self-regulatory organization of the advertising industry in the country, sent out an enforcement notice to more than 50 companies advertising crypto. The regulator’s notice instructed the agencies to thoroughly review their advertisements and ensure they comply with the rules.
Similarly, an independent, non-profit, U.S.-based advertising watchdog organization, Truth in Advertising (TINA.org), called out 19 celebrities for promoting NFT collections without disclosing their association with the project.
Australia has also been maintaining a strict approach to deceptive advertisements related to crypto. In October, the Australian Securities and Investments Commission (ASIC) launched civil proceedings against a local firm because of the misleading representation of its token.