Transport for London (TfL) has been urged to ban adverts for unregulated financial products after it ran a three-week poster campaign for a crypto token funded by an anonymous group.
Posters for Floki, a so-called meme coin named after a dog owned by Elon Musk, appeared on buses and in Underground stations across London last month.
Since the invention of bitcoin in 2009, the software used to make crypto coins has become widely available, leading to hundreds of new digital tokens, with many based on jokes and internet memes, such as Dogecoin. But digital tokens remain unregulated in the UK and many other countries, and some have been used as scams.
Siân Berry, the Green party London Assembly member, has tabled a question to Sadiq Khan, the London mayor, about the poster campaign. She said: “This should have raised a red flag and someone at TfL should have looked at this before it was approved. We have guidelines on junk food and on advertising.”
She said TfL had accepted three ads for crypto products, including Floki Inu, in recent weeks. “Where the advert says ‘this is completely unregulated, you may lose all your money’, they ought to have had second thoughts. I don’t think cryptocurrency ads should be on the network. They’re unethical.”
There is no evidence that the entities behind Floki Inu are scammers, but digital tokens can be used in “pump and dump” scams, where a small number of investors pump attention towards a coin, sometimes using internet influencers, then rake in large profits by dumping their assets after the price rises.
At the end of October a token based on the Netflix show Squid Game gained worldwide publicity, prompting a 310,000% rise in value to $2,856 in a single day. But the value collapsed within hours and the anonymous developers behind the Squid token have disappeared, apparently with a profit of at least $2m.
In September the chair of the Financial Conduct Authority (FCA), Charles Randell, called for ministers to give it powers to regulate cryptoassets after Kim Kardashian West was paid to advertise Ethereum Max, a token that had been created a month earlier by unknown developers.
TfL admitted to the Observer that it did not know the identity of the people or organisation funding the posters, which read: “Missed $Doge? Get $Floki.”
The website promoting Floki Inu coins gives no names of anyone involved, nor contact address, and the RealFlokiInu Twitter account did not respond to the Observer’s request for information about the entity or individuals behind Floki Inu.
Similar inquiries by the FT last month were also unanswered, but it quoted someone called Sabre, describing themselves as the group’s head of marketing, saying that the campaign was intended to “legitimise” the coin and that “You get a lot of scam artists in this game.”
Jamie Bartlett, presenter of the BBC podcast The Missing Cryptoqueen, said that he had been surprised to see the adverts for Floki: “This is real wild west territory – it’s very hard to know which ones are serious projects and which pump and dump schemes.
“Some people think all cryptocurrencies are a scam, but there are other ones designed by really technical people who were quite pioneering in their understanding of encryption, and how these coins might be used as a sort of banking settlement system.”
The new meme coins were a reaction to that seriousness, he said. “They use funny internet memes – Dogecoin is based on a famous 4chan dog meme that was funny, although no one could really explain why. The meme coins are going back to that playful internet sub-culture.
“For people to now be advertising these absurd joke coins seems to be another step, another level of risk. People lose a lot of money on these speculative crypto investments. Ethically, I think TfL should consider whether it’s wise to have these types of ads on their buses.”
Chris Reader, head of commercial media at TfL, said: “Since 2018, we have asked our advertising partners to refer all cryptocurrency advertising to us for review prior to it running on our estate. When reviewing copy now from cryptocurrency brands who wish to advertise on our estate, we ensure that campaigns contain sufficient information to comply with both our policy and the ASA [Advertising Standards Authority] ruling.”
The Treasury consulted last year on whether cryptoassets should be covered by financial promotions rules. An FCA spokesperson said: “The FCA does not currently have the power to oversee how unregulated cryptoassets, like Floki Inu, are advertised to consumers. We continue to work with HM Treasury on their proposals to extend financial promotion rules to unregulated cryptoassets.
“The FCA has continually warned of the risks of cryptoassets. If people invest in these types of product, they should be prepared to lose all their money and they are unlikely to have access to any redress or compensation schemes.”