The South African Government releases new regulations for crypto asset advertisements to protect consumers and ensure fair practices in the crypto market.
According to the legal paper prepared by Advertising Regulatory Board (ARB), now South African crypto advertisements must clearly state that investing in crypto assets may result in the loss of capital.
The advertisements also should state that due to crypto market volatility, the value of these assets is variable and can go up or down.
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The lawmakers didn’t also skip mentioning the proper wording that needs to be used in the advertisements. They gave an example of how the phrasing in ads should be:
Investing in crypto assets may result in the loss of capital.
Additionally, the document suggests that the advertisements must also comply with other clauses outlined in the regulation. This includes ensuring that the overall message does not contradict the warning statements.
According to the document, providing an easily understandable explanation of the product or service comes up as crucial as well. The latter comprises giving a balanced message about the returns, features, benefits and risks associated with the product or service.
The legal paper states that advertisements for crypto asset service providers should not encourage the purchase of crypto assets on credits, if they are not registered credit providers.
However, these service providers will still be able to provide information about payment methods.
Additionally, when using influencers or ambassadors to promote a crypto asset product or service, specific requirements must be followed. These requirements include sharing factual information only and not offering advice on trading or investing in crypto assets or promising benefits or returns.
In another crypto regulation-related news, the Australian government announced plans to regulate the crypto sector by defining crypto assets that are subject to the rule, following a call for consumer protection.