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Crypto.com is in legal trouble with UK’s watchdog for misleading advertisements, while crypto companies are parting ways with sports partnerships.
The UK Advertising Standard Authorities (ASA) have accused the Australian Football League (AFL) Partner, Crypto.com, of misleading advertising. The trouble continues to mount up for crypto sports sponsorship as many deals are getting scrapped.
Crypto.com Under Constant Trouble From the Advertising Standard Authorities
Crypto.com and ASA have been in a constant clash on multiple occasions. Recently in Dec. 2022, ASA raised a dispute on a Crypto.com Facebook ad and ordered that it should not “appear again in its current form.”
The Facebook ad had a video tutorial showing how to purchase NFTs in the Crypto.com app. The ASA believed that the ad was misleading because it failed to illustrate the risk of investing in NFTs and didn’t clarify that fees would apply.
Crypto.com, in its defense, said that it only promoted the platform and not specific NFTs. Further, the exchange argued that the ad did not show selling capabilities. The ad illustrated the purchasing of NFTs, for which customers don’t have to pay fees.
Earlier, in Jan 2022, ASA banned two advertisements from Crypto.com which had to do with buying crypto with credit cards and earnings rates. The ASA believed those advertisements were misleading because they failed to illustrate the risk of the investment, were irresponsible, and took advantage of consumers’ inexperience or credulity.
The community is disappointed with the fact that government allows gambling advertisements.
More Trouble Incoming From Australia?
In Jan 2022, Crypto.com signed a five-year partnership with AFL to become the official cryptocurrency exchange of the event. The exchange enjoys promotions around AFL stadiums and a naming rights partnership for the ‘Crypto.com AFL Score Review.’
According to The Guardian, the ASA rulings may invite further scrutiny of Crypto.com promotions from the Australian Securities and Investments Commission (ASIC.) Dr. Paul Mazzola, a cryptocurrency expert, believes that Crypto.com and AFL partnership has a “reputational risk for the sporting code.”
Crypto Parting Ways With Sports Partnerships
In the past year, various crypto sports sponsorships are under trouble. Especially after the collapse of FTX, there’s a dent in sponsorships across various sporting events. The FTX exchange got the naming rights of the Miami Heat basketball team’s stadium; it was renamed FTX Arena. But Miami-Dade County doesn’t want itself to be associated with FTX and petitioned a judge to free it from the deal.
Recently, Ferrari removed Velas from a $30 million deal. The F1 team signed Velas as a premium partner in 2021 to help bring digital collectibles and unique experiences to fans, but the agreement is canceled now.
Similarly, Tezos terminated its partnership with the F1 team, Red Bull Racing, in December last year.