New South African Code Says Crypto Asset Ads Must Include Capital Loss Warning – Africa

Crypto asset service providers in South Africa that want to attract investors through advertising must “explicitly and clearly state that investments in crypto assets may be madelead to capital loss.” Influencers working on behalf of crypto asset service providers must “not offer advice on trading or investing in crypto assets and must not promise benefits or returns.”

New code the result of collaboration between ARB and crypto entities

According to the South African Advertising Regulatory Board (ARB)’s latest code of conduct, crypto-related advertising must clearly warn the public that investing in digital assets “may result in loss of capital.” Additionally, ARB's most recent code states that the overall wording of such advertisements should not contradict this warning.

The new crypto asset advertising guidelines, which are reportedly the result of collaboration between ARB and South African crypto exchanges, are apparently designed to prevent scammers from targeting their victims through regulated media platforms. ARB CEO Gail Schimmel commented on the inclusion of crypto assets in the latest promotional code. allegedly said:

This is a wonderful example of an industry seeing the damage that could be done in its name and striving to regulate the problems itself without being forced to do so by [the] government. This has been an exciting project and we know it will lead to better protection for vulnerable consumers.

Meanwhile, in addition to warning about capital losses, the Self-Regulatory Committee wants the advertisements to use language that is easily understandable to the target audience. With respect to promises of future income or profits, the new code requires that such advertisements must be “supported by adequate justification meeting the requirements of Section 4.1 of Section II.”

Likewise, advertising that refers to past performance should not be presented in such a way as to create a “favorable impression of the product or service being advertised.”

If an influencer is hired or used to attract potential investors, the new code states that the person must “only share factual information.” Additionally, influencers and project ambassadors are prohibited from “offering advice on trading or investing in crypto assets and may not promise benefits or returns.”

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively about the economic struggles of some African countries, as well as how digital currencies can provide an escape route for Africans.

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