New Advertising Rules Require Crypto Investment Warning Label

 

Advertising Regulatory Board (ARB)) in South Africaintroduced new rules, warningcrypto investors about the possibility of capital loss.Cryptocurrency advertising should be simple and understandable to the target audience and provide a balanced view of the profitability, features, benefits and risks associated with the product or service. Industry players hope this will make it harder for scams likeMirror Trading International, which promised a yield of 10% per month.

According to the new rules:

advertisements must be supported by appropriate justification for how they were calculated.

Advertising should clearly state that investing in crypto assets can lead to loss of capital, as their value is volatile and can both rise and fall.

“Advertising of crypto asset service providers,who are not registered credit providers should not encourage the purchase of crypto assets on credit. This does not exclude advertising that provides information about payment methods offered by cryptoasset service providers.

Another new rule concerns powerful peopleor ambassadors, which are often used to promote a crypto asset product or service. They can only share factual information and cannot give advice on trading or investing in crypto assets, or make promises regarding the benefits or profits from investing.

ARB was created by industry representativesmarketing and communications to protect consumers through self-regulation of advertising, including packaging. “Ethical advertising rules are non-negotiable for us as an industry”, – says Marius Reitz, general manager for Africa at the Luno crypto exchange, who led the project. We don't want unscrupulous advertisers making claims that mislead vulnerable consumers about the reality of crypto investing”

“This is not only useful for consumers, butand for companies that comply with these codes. Data shows that responsible advertising helps companies build better relationships with customers, increasing trust, loyalty and ultimately customer retention. ARB's decision to specifically include cryptocurrencies in its advertising standards is welcome as it lays the foundation for better consumer protection.