UK regulator rules Floki Inu crypto breached advertising standards

2 Mar 2022

Image: © vaneeva/Stock.adobe.com

The cryptocurrency named after Elon Musk’s dog featured in ads on public transport systems in London and Dublin last year.

Advertisements by cryptocurrency company Floki Inu have been found to be in breach of the UK’s advertising standards for taking advantage of consumers’ inexperience with crypto.

In a ruling published today (2 March), the UK Advertising Standards Authority (ASA) said that the Floki Inu ads, which featured on the London Underground last November, “exploited consumers’ fears of missing out and trivialised investment in cryptocurrency”.

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Ads for the cryptocurrency were also seen on Dublin’s public transport system last year.

The ASA ruled that Floki Inu “took advantage of consumers’ inexperience or credulity” by advertising an unregulated financial asset to the average consumer who was unlikely to “comprehended the full meaning of the campaign”.

The ad in question had an image of a cartoon dog wearing a Viking helmet, with text that read ‘Missed Doge. Get Floki’ – a reference to Dogecoin.

Smaller text at the bottom of the ad read: “Your investment may go down as well as up in value. Cryptocurrency is not regulated in the UK.”

Floki Inu is a cryptocurrency whose name was inspired by Tesla CEO Elon Musk’s dog Floki, which is a Shiba Inu. Its ads attracted complaints around the ethics of advertising cryptocurrencies to those who don’t understand its risks.

The company responded to the ASA investigation by saying it had included a warning of risk in its ads and had approval from the UK’s Committee for Advertising Practice.

Folki Inu argued that its risk statement at the bottom of the ad made it amply clear that the value of the cryptocurrency could do down after investment, as was the case with Dogecoin, preventing the average consumer from rushing to invest in the coin.

According to the ruling, Floki Inu must not advertise its cryptocurrency “in the form complained about” and ensure that its future ads do not exploit consumers’ fear of missing out, trivialise investment in cryptocurrency or exploit consumers’ lack of experience.

Meanwhile, the EU has been struggling with creating a legal framework for cryptocurrency assets.

Last week, CoinDesk reported that the European Parliament postponed a vote on a regulatory package for crypto assets after a leaked draft was criticised for a provision that would seek to ban cryptocurrencies that rely on proof of work, such as bitcoin and Ether, in the EU over energy concerns.

Proof of work is a form of cryptographic proof used by cryptocurrencies to verify new transactions, add them to the blockchain, and create new tokens.

European Parliament rapporteur Stefan Berger said in a tweet that he will attempt to reach a compromise with all stakeholders to provide cryptocurrency assets with a proper legal framework without challenging proof of work.

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Vish Gain is a journalist with Silicon Republic

editorial@siliconrepublic.com