Misleading cryptocurrencies? ‘Cryptocurrency is not without risks’

Football stadiums, public transport or on social media. Cryptocurrencies are advertised quite well in various places. Radar dived into the crypto question and concluded that digital investing really is not without risks. But warnings about this in the crypto ads, it is not necessary in the Netherlands.

Cryptocurrencies are popular, especially among the younger generation. Research from Nibud shows that every fourth young adult has cryptocurrencies. You see ads about digital currencies everywhere, but there are no rules for these ads.

Recently, the experts from Subwaypanel their expert and critical opinion on cryptocurrencies. You can read about it here.

Crypto ads are misleading and unrealistic

Crypto specialist and BNRJournalist Aäron Loupatty explains that young people make easy money with crypto. “Investment is for adults, and crypto is modern and attractive to young people.” According to him, providers are responding to the FOMO aspect (fear of being missed) among young people. Under the guise of ‘you missed your chance before, but come in now’. Gerben Everts, director of the investors’ association VEB, calls these ads’ hot air ‘. He is concerned about the advertisements, which are not always realistic.

In England, an advertising watchdog intervenes in some advertising campaigns from crypto providers. According to them, the ads are misleading and you can still lose a lot of money. And also in Spain, these types of advertisements are enforced.

Advertising cryptocurrencies on social media with influencers

In the Netherlands, some crypto providers even sponsor football clubs. Like Floki at FC Twente and Iqoniq at FC Groningen. The latter has since gone bankrupt, something Loupatty finds strange: “They approve of a crypto company that is ‘shady’ and risky.” Everts agrees.

So-called ‘finfluencers’ also advertise for cryptocurrencies on social media. According to Loupatty, they paint the picture of themselves trading in certain digital currencies. But this is often not the case. Evers even talks about a ban on this type of social media advertising until appropriate rules are in place.

Awaiting rules when checking ads

Risk warnings are mandatory in investment product ads. This is not yet mandatory for cryptocurrencies. In 2024, there will be new European legislation to regulate the entire crypto market, including advertising. A supervisor should check this.

But it will take another two years and the Dutch government will not act against crypto-advertising in the meantime. “There will be a lot of accidents between now and two years,” says Evers. Lupattty is also surprised that there are few rules in the Netherlands.

Cryptocurrency ‘gambling’ and ‘pyramid schemes’

Radar also asked for an answer from our Minister of Finance Sigrid Kaag. She says the Netherlands is waiting for European rules but is afraid of risks to young people. According to her, the Financial Markets Authority (AFM) should warn about the risks. However, AFM again points to the legislator, ie the Ministry of the Kaag.

Tom van de Lee, from GroenLinks, calls the crypto market a “pyramid scheme” and compares it to “gambling”. SP member Mahir Alkaya does not believe that all cryptocurrencies are gambling. He calls it “risky investment objects”. But according to them both, the Netherlands should not wait two years with rules on advertising for the digital coins.

Want to watch the entire Radar broadcast? You can find yesterday’s section here.

Controversial multimillionaire in What Are They Doing It For ?: ‘How Strange’

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Crypto-advertising is ‘misleading’: ‘Actual advertising in hot air’

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