Jan 23, 2023 05:05
<p>South Africa’s Advertising Regulatory Board (ARB) issued new guidelines mandating a risk warning for all <a href="https://www.financemagnates.com/cryptocurrency/irelands-regulator-may-begin-clamping-down-on-crypto-ads-guidance-is-under-review/" target="_blank" rel="follow">cryptocurrency investment advertisements</a>. “Investing in Crypto assets may result in the loss of capital,” all crypto ads in the country need to show the exact message or something similar.</p><p>South Africa Mandates Crypto Risk Warnings </p><p>ARB, a self-regulatory initiative by the ad and public relations industry, specified that the advertisements must explain the products and services in an “easily understandable” manner. Also, they need to give a balanced message around “returns, features, benefits, and risks associated with the product or service.”</p><p>“Rates of return, projections, and forecasts must be supported by adequate substantiation,” the updated Code of Advertising Practice stated. “It must be communicated how any rate of return, projection, or forecast is calculated and what significant conditions apply.”</p><p>Additionally, the advertisers need to clarify the performance information making it clear that the past performance of the cryptocurrency is not an indication of future performance. “Any historical period or past performance should not be presented in such a way that it creates a favorable impression of the advertised product or service,” the guidelines added.</p><p>Check out the latest FMLS22 session on "Digital Assets’ Marketing Under A Magnifying Glass."</p><p>Crack Down on Crypto Influencers</p><p>In addition, the South African regulator is moving against the crypto influencers by compiling specific requirements for such endorsements.</p><p>“The influencer or ambassador may share factual information only. Influencers and ambassadors may not offer advice on trading or investing in crypto assets and may not promise benefits or returns,” the guidelines stated.</p><p>Many crypto companies have signed endorsement deals with heavy-weight celebrities, from Kim Kardashian to Tom Brady, for promotions. However, many such platforms turned out to be outright fraudsters.</p><p>Earlier, the US Securities and Exchange Commission (SEC) <a href="https://www.financemagnates.com/cryptocurrency/news/floyd-mayweather-endorsed-centra-tech-ico-co-founder-to-plead-guilty/" target="_blank" rel="follow">fined famous boxer Floyd Mayweather and rapper DJ Khalid for endorsing the $25 million</a> fraudulent initial coin offering (ICO) of Centra Tech. Last October, Kim Kardashian settled with the US regulator, paying $1.26 million for promoting EthereumMax.</p><p>Tom Brady and Gisele Bundchen endorsing now-collapsed crypto exchange, FTX.</p><p>The Regulatory Backlash against Crypto Ads</p><p>Meanwhile, the South African regulator is not the first to come up with specific crypto advertisement guidelines. Moreover, Thailand’s Securities and Exchange Commission (SEC) has imposed strict rules around the promotions and advertising of cryptocurrency companies, <a href="https://www.financemagnates.com/cryptocurrency/regulation/thailands-sec-mandates-risk-disclosure-for-crypto-ads/" target="_blank" rel="follow">mandating the showcasing of investment risks</a>.</p><p>However, the United Kingdom’s Advertising Standards Authority (ASA) looks to be at the forefront in the crackdown on 'misleading' crypto promotions. It has flagged the physical and digital ads of several well-known exchanges and some <a href="https://www.financemagnates.com/cryptocurrency/asa-shows-red-card-to-arsenal-fc-for-misleading-crypto-ads/" target="_blank" rel="follow">popular football clubs</a> for promoting their crypto industry partnerships.</p>
This article was written by Arnab Shome at www.financemagnates.com.
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