The digital asset industry has somewhat of a reputation for being a haven for scammers and criminals, where clearly illegal behavior is not punished, or punished differently than it otherwise would be in any other context. While this reputation might be well-earned, it is being steadily eroded by increasing commitment from law enforcement and regulators to hold bad actors to account.
However, the industry has a specific problem which, despite hurting consumers and adoption, receives little attention. The problem is dishonest advertising. Digital assets run almost entirely on hype, meaning advertising is everything. This is compounded by the fact that so much interest in digital assets is driven by price speculation, meaning large portions of the community have a vested interest in overlooking dishonest advertisers or worse, propagating the advertising themselves.
This has often led to a cart-before-the-horse situation, where minor products, services and innovations are advertised as revolutionary, or cast as a harbinger of mass adoption. This message is broadcast to an audience who have been primed, through continual community reinforcement, to accept this message without critique.
Take the attention that PayPal’s announcement that it would be supporting BTC received as an example—this was touted as the toppling of a huge domino on the way to mass adoption, yet the offering itself was inconsequential.
However, the fact remains: there are well developed bodies of law which protect consumers from misleading trade practices, and they have only been allowed to continue by the grace of regulatory inaction.
It is inevitable that this will change.
Revolut’s unfulfilled promises
An example which demonstrates all at once how detached corporate promises have become from reality, how easily they have been allowed to remain unchallenged, and how consumers are paying the price is that of Revolut.
Revolut is one of the more well-known fintech companies to have cropped up in recent years to promise a revolution in money management. In 2017, Revolut entered the digital asset game by offering customers the ability to buy “cryptocurrency” on the platform. The announcement touted the service as the “easiest and fastest way to buy cryptocurrency,” while Revolut’s homepage is plastered with its crypto purchasing features. The impression given by Revolut’s homepage—in plain English terms—is that their service can be used to purchase digital assets.
Years after the service was introduced, Revolut changed its terms and conditions on July 27, 2020, introducing the idea of ownership of the rights to the financial value of the digital asset despite there being no previous indication that this was not the status quo. In an email informing users of this change, Revolut said: “This essentially means that you will now own any cryptocurrency you buy using Revolut!”
Veterans familiar with digital asset advertising will know to interpret the word ‘essentially’ as ‘not at all,’ a correct assumption judging by the terms and conditions themselves. Any digital asset purchase or sale made on Revolut is merely an instruction for Revolut to make the purchase or sale on your behalf. In the case of a purchase, you are only purchasing a ‘beneficial right’ to the asset, which Revolut says means you have the right to tell them when to sell or transfer the asset, but in reality, any such instruction can be accepted or rejected in accordance with Revolut’s terms and conditions, which is so broad as to essentially grant Revolut complete discretion over which instructions to accept and which to ignore.
“Sometimes we might refuse your instruction to buy or sell cryptocurrency. If we do, we will not be responsible for any losses you suffer as a result.”
So, you aren’t purchasing coins, just purchasing the right to the value, and you can only realize that value by instructing Revolut to sell—instructions which…