Crypto asset service providers in South Africa seeking to attract investors via advertisements must “expressly and clearly state that investing in crypto assets may result in the loss of capital.” Influencers working on behalf of crypto asset service providers must “not offer advice on trading or investing in crypto assets and may not promise benefits or returns.”
New Code the Result of Collaborative Effort Between ARB and Crypto Entities
According to the latest code of practice released by South Africa’s Advertising Regulatory Board (ARB), crypto-related advertisements must clearly warn the public that investing in digital assets “may result in the loss of capital.” Furthermore, ARB’s latest code states that the overall wording of such adverts should not contradict this warning.
The new crypto asset advertising guidelines, which are reportedly the result of the collaborative effort between ARB and South African crypto exchanges, are seemingly intended to preclude scammers from targeting their victims via regulated media platforms. Commenting on the inclusion of crypto assets in the latest advertising code, Gail Schimmel, the CEO at ARB, reportedly said:
This is a wonderful example of an industry that sees the harm that could be done in its name and steps up to self-regulate the issues without being forced to do so by [the] government. This has been an exciting project and we know that it will result in better protection for vulnerable consumers.
Meanwhile, in addition to the capital loss warning, the self-regulating board wants the ads to use language easily understood by the targeted audience. Concerning the promises of future earnings or gains, the new code stipulates that such ads must be backed “by adequate substantiation that complies with the requirements of Clause 4.1 of Section II.”
Similarly, advertisements that refer to past performances should not be presented in a way that leaves a “favourable impression of the advertised product or service.”
Where an influencer is hired or used to entice potential investors, the new code states that the concerned individual must “share factual information only.” Furthermore, influencers and project ambassadors are barred from offering “advice on trading or investing in crypto assets and may not promise benefits or returns.”
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
#Africa, #AdvertisingRegulatoryBoardARB, #CapitalLossWarning, #ConsumerProtection, #CryptoInfluencers, #CryptoInvesting, #GailSchimmel, #SelfRegulation