The cryptocurrency products and services are a part of a new clause in South Africa’s code of advertising practice which the Advertising Regulatory Board has introduced. Through regulated advertising practices, the country aims to protect consumers from unethical advertising.
As per the issue, the companies and individuals in South Africa shall abide by specific advertising standards as the provision of cryptocurrency products and services introduced to Section III of the country’s advertising standards.
According to the first clause, the adverts that include cryptocurrency offerings shall clearly state all the possible capital losses with varying asset values. Thus, advertisements shall not contradict warnings about potential investment losses, if any.
Furthermore, the advertisement for particular services and products shall also be explained in an “easy to understand” manner. All the relevant messages about features, returns, risks, benefits, and other substantial information about the products or services shall also be furnished. Alongside, the advertisement policies require persons to adequately substantiate all the projections or forecasts, including calculation methods, conditions applied, assumptions considered, and more.
It also states that any advertisement from cryptocurrency service providers that are unregistered credit providers shall not encourage the acquisition of cryptocurrencies using credit. Moreover, not just companies but also brand ambassadors and social media influencers are expected to comply with advertising standards. This primarily includes sharing factual information offered services on trading or investment in crypto assets.
South Africa regulating advertisement compliances in the cryptocurrency industry is seen as the result of potential harm that has already been done by a few crypto firms in the country. The popular companies that took to headlines in 2020 and 2021 Mirror Trading and Africrypt had put their investors and users in great trouble.