Crypto asset service suppliers in South Africa who hope to attract investors through advertising must “expressly and clearly state” that investing in digital assets may result in the loss of principal capital. This warning is part of the latest code of practice published by the Advertising Regulatory Board (ARB).
Collaboration between ARB and Crypto Entities Leads to New Guidelines
Not only should these ad campaigns include the warning about possible principal losses, but the language used should also be simple. The new code also states that any claims of future profits or returns must be backed up with “an adequate justification that meets the requirements of Clause 4.1 of Section II.”
In addition, any ads that are based on previous performance should be avoided, and they should not create a “favorable impression of the advertised product or service.”
When it comes to influencer engagement, ARB’s code states that they should “share only factual information” and should not offer “advice on trading or investing in crypto assets and may not promise benefits or returns.”
Gail Schimmel, ARB CEO, commented: “This is a great example of an industry recognizing the potential harm and taking steps to self-regulate it without needing to be forced to by [the] authorities. This has been an exciting project, and we know it will increase safety for vulnerable customers.”
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