TL;DR: Cryptocurrency exchange BitMEX was formally sanctioned by the UK’s Advertising Standards Authority (ASA), following four complaints insisting the company’s advertisement, celebrating Bitcoin’s 10th anniversary this year, “exaggerated the return on the investment,” and “failed to illustrate the risk of the investment.”
BitMEX Sanctioned by UK Advertising Standards Authority
On 3 January 2019, cryptocurrency exchange BitMEX had an advertisement run in the UK newspaper, Times of London. It coincided with celebrating the 10 year anniversary of the Bitcoin genesis block. The ad read, “Ten years ago today, the first block of the Bitcoin blockchain referenced the front page of The Times. Turns out, that was a pretty big deal.” Spanning two full pages, the ad also featured a logarithmic scale chart, showing the coin’s growth in price since its birth.
Scales, apparently, make all the difference. Arithmetic scales increase by the same number amount at each interval, whereas logarithmic charts, as in the BitMEX ad, can start at $1, move to $10, $1,000, and to $100,000. The ASA agreed “such scales were a valid and useful way of presenting data,” however, “in the absence of clear explanatory information, the graph was unlikely to be familiar or readily understandable to the national newspaper audience to whom the ad was directed.”
Furthermore, “The graph depicted a sudden rise in the value of Bitcoin after July 2010. The highest value recorded on the graph was of more than $10,000 between July 2017 and Jan 2018,” the ASA described. At issue was the ad’s purpose. BitMEX maintained it was not a promotion of their services necessarily as a “commemoration of an important landmark in the industry and that any optimism represented by the feature referred primarily to the security and technology of a system which was simultaneously stored on thousands of computers around the world, with no single entity controlling the blockchain,” the ASA recalled.
BitMEX also argued how “the approximately 5,200,000% growth from 18 August 2010” could really only be shown by logarithmic scale as a “sensible way of depicting such a significant increase.” The ASA went on to dissect the BitMEX scale further, finding fault along its axises, and “considered that at least some specialist knowledge of that type of scale would be needed to interpret the graph.” The exchange was ordered to not run the ad again “in its current form,” and to better “ensure that financial information in their ads was set out in a way that allowed it to be readily understood by the audience being addressed and that the risks of investments were sufficiently clearly signposted.”
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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