The consumer watchdog is reportedly investigating several unnamed crypto firms.
The United States Federal Trade Commission (FTC) is targeting certain crypto companies over deceptive or misleading advertising. With the latest move, the FTC appears to follow in the footsteps of the SEC as the crackdown on the ecosystem broadens.
According to a Bloomberg report, FTC spokeswoman Juliana Gruenwald Henderson said:
“We are investigating several firms for possible misconduct concerning digital assets.”
- Henderson, however, declined to provide further details regarding which firms were being targeted by the authorities.
- FTC’s official website states that “under the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. For some specialized products or services, additional rules may apply.”
- The agency essentially upholds laws that require truth in advertising, including rules that individuals reveal when they have been paid for endorsements or reviews.
- Several high-profile influencers, such as Kim Kardashian, have reportedly run afoul of the FTC’s standards in the past.
- While the FTC has not been stringent about most cases, SEC, on the other hand, has been a warpath over anything related to the crypto-asset industry.
- In fact, the American socialite was fined $1 million by the US Securities and Exchange Commission (SEC) in a fraudulent crypto promotional case.
- During the bull run of 2021, several crypto firms lavishly poured funds into advertising in a bid to capture new investors. Many featured celebrities such as Hollywood actor Matt Damon and sports star LeBron James as well as Shaquille O’Neal.
- This summer, the Advertising Standard Council Of India (ASCI) has discovered over 400 crypto-ads to be potentially violating advertising and promotion guidelines of virtual digital assets (VDAs), and guidelines for influencer advertising.
- The UK Financial Conduct Authority (FCA) also launched an investigation against companies for misleading crypto ads.