Business

Dan Taylor

UK advertising watchdog slams BitMEX over misleading crypto ad

SegWitCoin (BTC) is no stranger to scams and fraudulent activity. But the latest warning shot fired by regulators has had a less traditional target, in the form of leading crypto derivatives exchange BitMEX.

On Wednesday, the U.K. Advertising Standards Authority (ASA) upheld a complaint against the exchange for an advertisement for BTC it says is misleading, with specific reference to a graph published by the exchange earlier this year.

Dating back to January, the offending ad purports to show the price performance of BTC, with a view to enticing would-be crypto investors into parting with their cash.

However, ASA decided to uphold four complaints against the ad, which had suggested that the data shown was misleading and inaccurate, and failed to reflect the true extent of the risks involved in investing in the cryptocurrency.

In the ad, BitMEX included two statements which gave rise to the complaints, which the agency agreed were misleading in the context of BTC’s actual price performance over the period:

3 January 2009. Ten years ago today, the first block of the Bitcoin blockchain referenced the front page of The Times…3 January 2019. Turns out, that was a pretty big deal.

In response, BitMEX attempted to defend the ad, saying it was part of a campaign to celebrate the 10-year anniversary of the genesis block of Bitcoin.

It also argued that as an exchange, it has no direct interest in the underlying value of the cryptocurrency, and that the scale used was nevertheless appropriate, claiming, “The logarithmic scale of the graph significantly understated the scale of the rise in its value which appeared as modest upward growth rather than the approximately 5,200,000% growth from 18 August 2010.”

However, the advertising watchdog held that the graphic was liable to misinterpretation, particularly amongst those without specialist knowledge of BTC and other cryptocurrencies.

And as with all cryptocurrency deceptions and scams, it is these investors and users who are particularly vulnerable to making ill-informed decisions about investing fiat in cryptocurrency.

The ASA also found that the ad did not sufficiently address the significant risks of investing in BTC, which it said should have been referenced more directly.

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