New clause in South Africa’s cryptocurrency advertising code
The Advertising Regulatory Board (ARB) in South Africa has introduced a new regulation for the cryptocurrency business. This clause is intended to protect consumers from unethical advertising in the cryptocurrency industry.
A new clause was added to Section III of the Advertising Code of the nation of South Africa, and it stipulates that businesses and people in the country are required to comply with specific advertising standards related to the offering of cryptocurrency-related goods and services.
‘Explicitly and clearly’ stating that investments can result in the loss of cash “since the value is variable and can go up as well as down” is something that all advertisements, including those for cryptocurrency offers, are required to do under the first clause of the regulation.
In addition, advertisements indicating potential investment losses must not contradict any warnings provided.
It is important that marketing communications for certain services and goods are presented in a way that is “clearly understood” by the target demographic.
Advertisements are required to make statements that are fair and unbiased about the returns, features, benefits and dangers associated with the product or service being marketed.
Rates of return, predictions or forecasts must also be fully supported, including a description of how they are calculated and an explanation of the circumstances that apply to the return being advanced.
Any information that refers to past performance cannot be used to guarantee future performance or returns, and it should not be presented in a way that generates “a favorable image of the product or service being marketed.” [Case in point:]
It is inappropriate for advertisements placed by bitcoin service providers who are not also registered credit providers to promote the purchase of cryptocurrencies through credit.
This does not, however, prevent service providers from promoting associated payment options that they provide to customers.
In addition, social media influencers and brand ambassadors will be required to adhere to specific advertising guidelines.
This includes the need for truthful information to be shared, as well as the prohibition on giving advice on trading or investing in crypto-assets and the prohibition on making claims of benefits or returns.
