The cryptocurrency industry faced a difficult time in 2022. Thus, regulators from around the world have started putting user protection as a key aspect. While a few regions have set up specific teams and units to monitor this novel asset class, most others have been tightening the screws.
Taking a step in the latter direction, South Africa’s Advertising Regulatory Board recently announced new measures.
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What are the new Cryptocurrency rules?
According to the latest regulations issued on Monday, crypto ads in South Africa need to warn buyers about the risks involved. Specifically, the guidelines stated,
“Advertisements must expressly and clearly state that investing in crypto assets may
result in the loss of capital as the value is variable and can go up as well as down.“
Furthermore, cryptocurrency product or service providers have been asked to explain
the necessary details in a way that is “easily understandable” for the intended target audience. Alongside, advertisements have to give a “balanced message” about the returns, features, benefits, and risks associated with the product or service.
This means, that details chalking out how projections are made have to be communicated properly along with the terms and conditions. Parallelly, disclaimers specifying that past performances are not indicative of future performances have to be made.
Similarly, another clause specifically focused on the rules for collectibles. According to the same, “great care” has to be taken by advertisers to avoid buyers being misled about the scarcity or the value of the items offered. Alongside, they have been instructed not to take any undue advantage of the lack of knowledge of the general public.
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As far as credit buys are concerned, the rules noted,
“Advertisements by crypto asset service providers who are not registered credit
providers should not encourage the purchase of crypto assets on credit. This does not
preclude advertisements providing information about the payment methods offered by
crypto asset service providers.“
Rules related to cryptocurrency influencers and ambassadors have also been reinforced. They have been asked to only share “factual information” via campaigns. Additionally,
“Influencers and ambassadors may not offer advice on trading or investing in crypto assets and may not promise benefits or returns.“
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