The Advertising Regulatory Board of South Africa has added a new section to the code of advertising practice that addresses cryptocurrency goods and services.
The Advertising Regulatory Board (ARB) of South Africa has added a new provision for the cryptocurrency sector to shield consumers from unethical advertising.
A new provision added to Section III of the South African advertising code mandates that businesses and people adhere by particular advertising requirements relating to the offering of bitcoin products 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 certain 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 conditions 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 advertising the linked payment options they offer.
Brand ambassadors and social media influencers must adhere to specific advertising rules as well. This includes being obliged to provide truthful information while being forbidden from giving advise 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 stated 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.”
ARB CEO Gail Schimmel expressed her hope that the initiative will lead to stronger safeguards for South Africa’s “sensitive customers” in a statement she shared with Cointelegraph:
“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.”
Investors in cryptocurrencies from all around the world have recently fallen victim to some serious frauds. As its CEO Johan Steynberg left the country with exclusive possession of wallets containing around 23,000 Bitcoin that belonged to hundreds of investors, Mirror Trading International made news in South Africa throughout 2020 and 2021.
In 2021, investors lost money on the South African investment plan Africrypt. The brothers Raees and Ameer Cajee claimed that a hacking event had resulted in the loss of almost $200 million worth of cryptocurrency that the fund was managing.