• South Africa has mandated new guidelines to protect consumers from unethical advertising related to cryptocurrency products and services.
• These guidelines include that crypto adverts must “expressly and clearly state that investments may result in the loss of capital as the value is variable and can go up as well as down”.
• Crypto adverts must also give balanced messages around returns, features, benefits, and risks related to the associated product or service.
The South African Advertising Regulatory Board (ARB) recently released an updated code of advertising practice to address the need for consumer protection in the rapidly developing crypto market. The code includes a set of newly implemented guidelines for companies and individuals dealing with cryptocurrency products and services in South Africa.
The ARB is aiming to ensure that crypto adverts are transparent and properly inform consumers of the risks associated with investing in the volatile cryptocurrency market. Adverts must include detailed explanations of the offer, including a “clear and easily understandable” explanation of the product or service being advertised. Additionally, it must “expressly and clearly state that investments may result in the loss of capital as the value is variable and can go up as well as down”.
The ARB has also mandated that crypto adverts provide balanced messages related to returns, features, benefits and risks associated with the product or service. Companies and individuals must be upfront about potential investment losses and refrain from sugar-coating or denying warnings related to these risks.
The ARB is taking these steps to ensure that South African consumers are informed and protected from unethical, misleading or deceptive advertising practices related to cryptocurrency products and services. The board believes that, by providing clear and transparent information, crypto adverts can help protect consumers from the potential risks associated with investing in the volatile cryptocurrency market.