US FTC Probes Crypto Firms Over Misleading Ads

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According to Bloomberg News, the U.S. The Federal Trade Commission (FTC) is investigating multiple unnamed crypto companies for allegedly engaging in deceptive or misleading advertising. 

An official from the authoritative body stated that it was looking into “possible misconduct concerning digital assets,” but they have not disclosed the further details.

FTC spokeswoman Juliana Gruenwald Henderson stated in a statement:

“We are investigating several firms for possible misconduct concerning digital assets.”  

However, Henderson did not elaborate on which companies are under scrutiny or what caused the FTC to initiate its probes.

The organization also enforces laws concerning truth in advertising, such as disclosure requirements for those who get paid for making recommendations or reviews. 

The FTC states on its website that “when consumers see or hear an advertisement, whether it’s on the Internet, radio or television, or anywhere else, federal law says that ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence.”

FTC, SEC Cracking Down On Crypto Promoters

After the FTX exchange failed, regulators demanded a closer look at cryptocurrency firms. Texas’s financial regulator is looking into Brady and NBA all-star Stephen Curry following the collapse of Sam Bankman’s cryptocurrency exchange FTX, among other high-profile figures who may face prosecution. 

Both of them have been charged with breaking the law by promoting and advertising the now-defunct bitcoin exchange.

The Securities and Exchange Commission (SEC) charged Kim Kardashian in October with illegally promoting a cryptocurrency security, alleging that she failed to disclose that she had been funded to advocate for EthereumMax’s token. She stated she would cooperate with the SEC’s probe and pay a $1.3 million fine.

The UK’s Advertising Standards Authority released updated guidelines for advertising in March of this year. With this development, Advertisers have to market by adding the fact that crypto is unregulated in the United Kingdom and that the “value of investments is variable and can go down.”

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