Even though most crypto firms are not currently being accused of fraud, it may behoove their agency partners to come clean about the roles they played, said Timur Yarnall, co-founder and CEO of martech company Neutronian. Doing so could indicate good faith to the FTC as it investigates, while also taking a stab at the heart of the issue: enhancing consumer trust.
“Agencies that want to stay in the crypto game are going to realize they need to treat [partners] as [financial products], and obviously deal with all the liability they can,” Yarnall said.
Government crackdowns heating up
Government crackdowns on the ad industry’s relationship with crypto has been building for some time. At the end of last year, the Advertising Standards Authority—a U.K. watchdog group—banned several crypto ads for “irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment.”
The ban affected ads from Coinbase and fellow exchange eToro, as well as those from other crypto companies. Pizza chain Papa John’s was even roped into the censure over an ad it posted for a Bitcoin promotion, which reportedly “trivialized” the serious nature of cryptocurrency investing.
In the U.S., the Securities and Exchange Commission has typically been the agency to exert force over crypto advertising. The body in June released a campaign aimed to warn investors about celebrities shilling cryptocurrencies—a practice that reached a fever pitch during this year’s Super Bowl.