Monday, the Advertising Regulatory Board of South Africa issued new rules requiring crypto commercials to expressly and clearly explain that investing in crypto assets may result in a loss of cash since the value is volatile and may go up and down. At least in one country, companies, celebrities, and influencers that sell cryptocurrencies may soon be required to warn prospective investors that their purchases may result in financial catastrophe.
In accordance with a new clause added to Section III of the country’s advertising law, businesses and people in South Africa must adhere to specific advertising requirements for the offering of bitcoin goods and services. The new clause is clause 17 of Section III, and the full text follows:
The first article stipulates that advertisements, including those for cryptocurrencies, must declare explicitly and clearly that investments may result in the loss of capital since the value is changeable and may go up as well as down. In addition, advertisements must not contradict cautions regarding possible investment losses.
In accordance with the guideline, advertorials must be well-balanced and concise, and they must avoid presenting prior performance in a manner that creates a positive image of the marketed product or service. In contrast, influencers and ambassadors may only disseminate accurate information and may not give advise on trading or investing in crypto assets or guarantee advantages or returns.
Marius Reitz, GM for Africa at Luno said that rules around ethical advertising are non-negotiable for the crypto industry.
We don’t want rogue advertisers making claims that mislead vulnerable consumers about the reality of crypto investment. It is important to us that consumers enter this market with their eyes open and their expectations realistic.
Marius Reitz, GM (Africa) – Luno
Advertisements from cryptocurrency service providers who are not registered credit providers should not promote the use of credit to purchase cryptocurrencies. However, this does not stop service providers from promoting linked payment options.
