Regulators in the United Kingdom have rules. The cryptography of Floki Inu violated advertising rules.
Last year, advertisements for the cryptocurrency named after Elon Musk’s dog were displayed on public transportation networks in London and Dublin.
Advertisements by cryptocurrency startup Floki Inu were deemed to be in violation of the United Kingdom’s advertising regulations because they took advantage of customers’ lack of knowledge about cryptocurrency.
The Advertising Standards Authority (ASA) of the United Kingdom (UK) stated in a judgement issued today (2 March) that the Floki Inu advertisements, which were shown on the London Underground last November, “exploited consumers’ concerns of losing out and trivialised investing in cryptocurrencies.”
Last year, advertisements for the cryptocurrency were also noticed on the city’s public transportation system.
Consumers’ inexperience or naivety was used, according to the Advertising Standards Authority, when Floki Inu advertised an unregulated financial asset to the general public, whose “complete understanding of the campaign” was improbable.
The advertisement in question included an image of a cartoon dog wearing a Viking helmet, with the caption ‘Missed Doge’ beneath it. Get Floki’, which is a play on the word Dogecoin.
A smaller piece of text at the bottom of the advertisement stated: “The value of your investment may decrease as well as increase.” In the United Kingdom, cryptocurrency is not regulated.”
Floki Inu is a cryptocurrency whose name was inspired by Elon Musk’s Shiba Inu dog, Floki, who is owned by the CEO of Tesla Motors. Its advertisements drew criticism for violating the ethics of advertising cryptocurrencies to those who are unfamiliar with their hazards.
In response to the ASA probe, the firm stated that it had incorporated a risk warning in its advertisements and that it had received permission from the UK’s Committee for Advertising Practice.
A spokesperson for Folki Inu stated that a risk disclosure section included at the bottom of the advertisement made it abundantly evident that the value of the cryptocurrency may fall after investment, as was the case with Dogecoin, discouraging the ordinary consumer from rushing to buy.
According to the ruling, Floki Inu must refrain from advertising its cryptocurrency in the “form complained about” and ensure that its future advertisements do not exploit consumers’ fear of missing out, trivialise cryptocurrency investment, or take advantage of consumers’ lack of experience in cryptocurrency.
Meanwhile, the European Union has been grappling with the creation of a legal framework for cryptocurrencies and digital assets.
It was reported last week that the European Parliament had postponed a vote to regulate crypto assets following criticism of a leaked draught that included a provision that would seek to ban cryptocurrency-based proof-of-work systems such as bitcoin and Ether from being used in the EU due to concerns about energy consumption and sustainability.
When cryptocurrencies validate new transactions, add them to the blockchain, and produce new tokens, they rely on a type of cryptographic evidence known as proof of work to do it.
Stefan Berger, rapporteur for the European Parliament, stated in a tweet that he will seek to find a consensus with all parties in order to provide cryptocurrency assets with an appropriate legal framework while not questioning proof of work.