Advertisements by cryptocurrency company Floki Inu in the UK and Ireland last year have been found to be in breach of the UK’s advertising standards for misleading the public into investing in the coin.

In a ruling published today (2 March), the UK Advertising Standards Authority (ASA) said that the Floki Inu ads, which featured on London and Dublin public transport last November, “exploited consumers’ fears of missing out and trivialised investment in cryptocurrency”.

The ASA ruled that the company “took advantage of consumers’ inexperience or credulity” by advertising an unregulated financial asset to the average consumer who was unlikely to “comprehended the full meaning of the campaign”.

The ads in question had an image of a cartoon dog wearing a Viking helmet, with text that read “Missed Doge. Get Floki” – a reference to Dogecoin which boomed to a market cap of $53bn last April.

Smaller text at the bottom of the ad read: “Your investment may go down as well as up in value. Crypto currency is not regulated in the UK”.

Floki Inu is a coin whose name was inspired by Tesla CEO Elon Musk’s dog Floki, which is a Shiba Inu. Its ads become the subject of a heated debate in the UK around the ethics of advertising cryptocurrencies to those who don’t understand its risks – with many calling for a ban.

The company has responded to the ASA ruling by saying it had included a warning of risk in its ads and checked with the UK’s Committee for Advertising Practice to see if they were good to be made public – for which it had approval.

Folki Inu argued that its risk statement at the bottom of the ad made it amply clear that the value of the cryptocurrency could do down very quickly after investment, as was the case with Dogecoin, preventing the average consumer from rushing to invest in the coin.

It also complained that the ASA ruling was unfair because it applied changes to its guidance for advertising cryptocurrency retrospectively.

According to the ruling, Floki Inu must not advertise its cryptocurrency “in the form complained about” and ensure that its future ads do not “irresponsibly exploit consumer’s fear of missing out and trivialise investment in cryptocurrency” or exploit “consumers’ lack of experience”.

The EU has been struggling with creating a legal framework for cryptocurrency assets.

Last month, CoinDesk reported that the European parliament postponed a vote on a regulatory package for crypto assets after a leaked draft was criticised for a provision that would seek to ban crypto that rely on proof-of-work, such as bitcoin and ether, in the EU over energy concerns.

Proof-of-work is a consensus mechanism used by cryptocurrencies to verify new transactions, add them to the blockchain, and create new tokens.

At the time, the European parliament rapporteur Stefan Berger said in a tweet that he will attempt to reach a compromise with all stakeholders to provide cryptocurrency assets with a proper legal framework without challenging proof-of-work.

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