South African crypto asset service providers seeking to attract investors through advertisements must “expressly and clearly state that investing in crypto assets may result in 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 is the result of collaborative effort between ARB and cryptographic entities
According to the latest code of practice published by the South African Advertising Regulatory Board (ARB), crypto-related advertisements must clearly warn the public that investing in digital assets “may result in loss of principal.” Additionally, ARB’s most recent code states that the general wording of such advertisements must not contradict this warning.
The new crypto asset advertising guidelines, reportedly the result of a collaborative effort between ARB and South African crypto exchanges, are apparently intended to prevent scammers from targeting their victims through regulated media platforms. Commenting on the inclusion of crypto assets in the latest ad code, Gail Schimmel, CEO of ARB, reportedly saying:
This is a wonderful example of an industry seeing the damage that could be done in their name and stepping up to self-regulate the problems without being forced to do so by the government. This has been an exciting project and we know it will result in better protection for vulnerable consumers.
In the meantime, in addition to the principal loss warning, the self-regulatory board wants the ads to use language that is easy for the target audience to understand. Regarding promises of future income or earnings, the new code establishes that such announcements must be supported “by an adequate justification that meets the requirements of Clause 4.1 of Section II.”
Similarly, advertisements that refer to past performance must not be presented in a way that leaves a “favorable impression of the advertised product or service.”
When an influencer is hired or used to attract potential investors, the new code states that the person in question must “share only factual information.” In addition, influencers and project ambassadors are prohibited from offering “advice on trading or investing in crypto assets and may not promise benefits or returns.”
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