The Advertising Regulatory Board (ARB) of South Africa in its code of advertising practice has added a new clause for the cryptocurrency industry to shield consumers from unethical and misleading advertising.
A new provision added to Section III of the South African advertising code mandates that businesses and people adhere to particular advertising requirements relating to the offering of bitcoin goods and services.
Ads, including those for cryptocurrency offers, are required under the first condition to “expressly and clearly” declare that investments might result in the loss of cash since “the value is changeable and can go up as well as down.” Additionally, advertisements must not contradict cautions on possible investment losses.
Advertising for specific services and goods must be made in a way that is “clearly understood” to the target audience.
Additionally, balanced messaging about returns, characteristics, advantages, and hazards related to the connected item or service must be included in advertisements.
Rates of returns, predictions, or forecasts must also be well supported, including how they were arrived at and the circumstances in which the proclaimed returns were made.
A positive image of the marketed product or service should not be created by any information about prior performance, which cannot be used to guarantee future performance or refunds.
Advertisements for cryptocurrency services from companies that are not authorized credit providers shouldn’t promote buying cryptocurrencies using credit. However, this does not prohibit service providers from promoting the linked payment options they provide.
Brand ambassadors and social media influencers must also adhere to specific advertising rules. This includes being obliged to provide truthful information while being forbidden from giving advice on buying, selling, or investing in cryptocurrency and from making promises of rewards or returns.
Exchanging cryptocurrencies Together with the ARB, Luno, a renowned service provider in South Africa, led the project. The exchange sought the regulatory body to draft new regulations with significant companies in the regional cryptocurrency market, according to Luno’s GM for Africa, Marius Reitz.
Reitz said that the sector is attempting to adopt a self-regulatory approach and that customers should be aware of the dangers associated with investing in cryptocurrencies.
In the nation, frauds and scams have preyed on unwary investors, requiring an effort to “clean up the business” by making it more difficult for fraudsters to operate:
“Media platforms are understandably looking for advertisers, but we were concerned that they weren’t doing sufficient due diligence on whether advertisers were above board.”
Gail Schimmel, CEO of ARB, said in a statement that she thought the initiative would lead to stronger safeguards for “vulnerable customers” in South Africa:
“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 government.”