Cryptocurrency adverts are to come under the same scrutiny as the promotion of stocks and insurance products, under plans revealed by the Treasury.

Rising prices for products such as bitcoin and ether during the COVID crisis have been matched by a surge in advertising.

They have been met by warnings from the Bank of England that investors could lose all their money.

It is estimated that 2.3 million people in Britain now own a crypto asset but the Treasury said some users may not fully understand what they are buying.

It said that the findings of its public consultation would result in legislation to bring the crypto sector ads into line with other financial products.

The promotion of cryptoassets would, the statement said, be subject to rules set by the Financial Conduct Authority (FCA).

Only a business regulated by the FCA or Bank of England would be allowed to issue their own promotions for cryptoassets, forcing unregulated firms to pay a regulated company to approve their ads.

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Chancellor Rishi Sunak said: “Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims”.

Industry body CryptoUK said it welcomed any clarity and guidance on promotions.

However, head of personal finance at AJ Bell, Laura Suter, said of the measures: “The move means that the FCA will have oversight of crypto adverts, in a bid to limit the number of misleading adverts touting Bitcoin and other cryptocurrencies.

“You only have to glance through a few cryptocurrency adverts to see that many overstate the potential returns on offer and fail to clearly lay out how much risk individuals will be taking.

“The Advertising Standards Agency has already been banning individual crypto adverts that it deems misleading or understating the risk involved in the market, but this new move by the government will lead to a wholesale tightening of the rules governing adverts.”

But she added: “While the move will help some people, it won’t stop the outright scams that have exploded off the back of Bitcoin and other cryptos soaring in price.

“What would have a far bigger impact is cracking down on social media accounts.”

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