The Advertising Standards Authority has banned an ad for cryptocurrency Floki Inu after ruling that it was “irresponsible”.
The ad, which appeared across the London Underground in November 2021, features an image of a cartoon dog wearing a Viking helmet alongside the slogan “Missed Doge? Get Floki.”
The ad was created in-house by the Floki team. It had not generated any complaints, but a spokesperson for the ASA said cryptoassets were a “red alert priority area” and that the regulator was conducting proactive monitoring of ads in this space.
In December 2021, the ASA banned seven examples of cryptocurrency marketing.
Looking at the Floki ad, the ASA challenged whether it “exploited consumers' fears of missing out” while also trivialising investment in cryptocurrency and taking advantage of people’s inexperience.
In response, Floki Inu said it had been told by the Committee of Advertising Practice that the ad complied with the CAP Code before the campaign was launched.
It added that the image of the cartoon dog, which is based on Elon Musk's dog Floki, was its corporate logo and was used in the ad for brand recognition purposes.
In addition, Floki Inu said its marketing was aimed at the “informed consumer” with knowledge of the cryptocurrency market.
The ad included warnings that investment could go up and down and that the cryptocurrency market is not regulated in the UK, which the company argued would prevent the "average consumer” from rushing to invest.
According to Floki Inu, the business had also consulted with CAP about the content of the risk warnings needed in its ads and it added that it had not been aware that it had to include information about the implications of Capital Gains Tax (CGT) on cryptocurrency investments.
The ASA acknowledged Floki Inu’s comments that the ad was only aimed at the “informed consumer”, however it argued that cryptocurrency was a topical matter and that the ads were addressed to a general audience using the London Underground.
According to the watchdog, the ad would have been understood to mean that for people who had “missed out” on Dogecoin, an older cryptocurrency, Floki was a new alternative. Dogecoin's value was boosted by occasional promotion by Musk.
It added: “In addition by equating Floki with Dogecoin, a cryptocurrency introduced in 2013, but one that by May 2021 had surged in value, it implied to those with more detailed knowledge of cryptocurrencies, that Floki too would be likely to sharply rise in price in a short period of time.”
The ASA further said that the size of the text of the risk warnings was small in relation to the headline claim, which meant that the "overriding impression" of the ad was the pressing need to buy Floki or risk missing out.
It acknowledged that the image of the cartoon dog was Floki’s logo but argued that the use of cartoon imagery in the context of an ad promoting cryptocurrency distracted people from the seriousness of an investment which was “volatile and unregulated”.
The ASA said: “For those reasons, we concluded that the ad irresponsibly exploited consumer’s fear of missing out and trivialised investment in cryptocurrency.”
The watchdog added that the ad also took advantage of people’s inexperience or credulity by not making it clear in the ad that CGT could be payable on profits from investing in cryptocurrency.
It therefore concluded that the ad was irresponsible and breached the CAP Code.
The ASA ruled that the ad must not appear again in the same form.
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