The South African supervisory authority takes measures against false crypto promotions

The South African supervisory authority takes measures against false crypto promotions

On January 23, the South African Advertising Regulatory Board (Arb) introduced new rules geared towards cryptocurrency in the country's advertising fodry to protect consumers from misleading advertising.

The new guidelines aim to ensure that advertising for cryptocurrencies specifies the risks associated with all cryptocurrency investments and makes it clear to consumers that they could lose their capital due to market volatility.

"Advertising must expressly and clearly point out that the investment in crypto-assets can lead to capital losses, since the value is variable and can increase and fall," said the Arb. In addition, they warned that the overall message of the complaint should not be contradicted to the warnings given above.

ads must explain the risks and advantages that are associated with the cryptocurrency product or the service you offer.

misleading advertising based on previous services banned

Another important aspect of the new guidelines is that crypto -related companies are not allowed to use excessive or misleading claims in their advertising. This also includes making claims about high returns or low risks without providing evidence.

companies must also represent their fees and fees transparently and clearly communicate all risks or restrictions in connection with their products or services. According to Arb, advertising for crypto -related services must make it clear that the "past performance" does not indicate future returns that can achieve cryptocurrencies. This is in accordance with the more comprehensive regulations for financial services, since each advertising for financial products must have a similar disclosure.

They also found that those who are not registered as a loan provider "should not promote the purchase of crypto-assets on credit". However, you can promote information about payment methods used by providers of crypto asset services.

influencers and ambassadors may only pass on factual information

As far as ambassadors and influencers are concerned, the Arb has determined that these people can only advertise for a product if they meet the requirements of the regulatory authorities.

Ambassador or influencer that do not meet the criteria of the supervisory authority for qualified investors "may only pass on factual information" without granting additional advice on the trade or creation of crypto-assets. This is a reaction to the controversy that came up during the Bitcoin bull run when many crypto companies published several controversial ads with famous personalities from all over the world to attract as many customers as possible.

For example, Crypto.com started one of the most aggressive advertising campaigns in the ecosystem with the participation of the actor Matt Damon, who invited his millions of supporters, to invest in the platform under the slogan "Fortune Favors the Brave".

After the massive collapse of the cryptom market and the losses of thousands of investors, South Park published a video in which Matt Damon, Gwyneth Paltrow, the investor Larry David and the tennis player Naomi Osaka were ridiculed to advertise their image for this type of investment.

The new South Park film was broadcast this evening.

They made fun of Matt Damon, who sold and

uh

Gut pic.twitter.com/ftixsbrrbl

- dyme (@Cryptoparadyme) 13. July 2022

Some thought it was funny, but the Arb started taking things seriously.

.