The Advertising Regulatory Board (ARB) for South Africa has included a new clause for the cryptocurrency industry aimed at protecting consumers from unethical advertising.
In a move to protect potential buyers, the Advertising Regulatory Board (ARB) in South Africa, a self-regulatory initiative by the ad and public relations industry, has released new guidelines on Monday that require crypto ads in the country to carry a warning that the capital may be at risk. Additionally, the ARB is seeking to tighten the rules for social media influencers who promote crypto.
The initial provision stipulates that advertisements, including cryptocurrency offerings, must clearly and explicitly mention that investments may lead to capital loss as the value can be variable and can increase or decrease. In addition, advertisements must not contradict warnings about potential investment losses.
Advertisements for particular services and products must be presented in a manner that is easy for the intended audiences to understand. They should also provide balanced information about returns, features, benefits, and risks associated with the product or service. Any rates of returns, projections or forecasts must be adequately supported, including how they are calculated and what conditions apply to the touted returns.
Any information relating to past performance cannot be used to promise future performance or returns, and should not be presented in a way that creates ‘a favourable impression of the advertised product or service.’
“This is a wonderful example of an industry that sees the harm that could be done in its name, and steps up to self-regulate the issues without being forced to do so by government.”Gail Schimmel, chief executive officer of the ARB, said.
Social media influencers and brand ambassadors in South Africa will be expected to adhere to certain advertising standards, such as the sharing of factual information, the prohibition of offering advice on trading or investing in crypto assets and the prohibition of making promises of benefits or returns.