The poster, which appeared in sites in Warwickshire, included the image accompanied by text that said: "Break your silence. Don’t let drugs and violence rip the heart out of your community".
The advert attracted complaints from two people who thought it was likely to cause distress, particularly to children, and felt it was inappropriate for untargeted outdoor display.
In its adjudication into the case, published today, the ASA says Crimestoppers acknowledged that the artwork could be seen as controversial and was sorry it had caused distress.
The charity said it had experienced success with a similar campaign in Ipswich, Suffolk, which had not attracted any complaints.
The report says the charity "strove to walk the line between effective and potentially difficult imagery in the artwork it used, and said the last thing it wanted to do was alienate members of the public".
The ASA ruled that the advert should not appear again and told Crimestoppers to ensure its marketing did not cause undue distress in the future.
"While we acknowledged the positive intention behind the campaign and understood that the image had been used to emphasise the serious implications of violent crime, we considered that the image was not directly relevant to crime or the overriding message of the campaign," the ASA ruling says.
"For those reasons, we considered that the ad was likely to cause unjustifiable distress when displayed in an untargeted medium and concluded that it breached the Code of Advertising Practice."
A Crimestoppers spokesman said the charity was sorry if the advert caused any offence.
"The campaign being run was designed to tackle drug-related violence, which can be a huge problem in some areas," he said.
"Generally, it is found that many people are reluctant to give information about this crime, either through fear or misguided loyalty, which is why it was felt that a hard-hitting image was required in order to make people think and to prompt a response.
"However, we accept the Advertising Standards Authority’s decision and will no longer be using the imagery in question."