South Africa adds new crypto clause to its advertising code

The regulatory body added the new changes in order to protect consumers from unethical advertising. This means that companies and individuals in South Africa must now abide by certain advertising standards when dealing with cryptocurrency products and services. 

The new clause was introduced to Section III of the country’s advertising code, and it requires that adverts, including cryptocurrency offerings, must clearly reveal and inform consumers that their investments could result in the loss of capital.  Furthermore, the advertisements in question should not contradict warnings about potential investment losses as per the new clause. The warnings and new rule implementations come in the context of crypto’s well-known volatility.

In South Africa, advertisements for cryptocurrency-related services and products should be explained in a manner that is easy to understand by the intended audiences. The ads should also inform audiences about any potential returns, features, benefits, and risks associated with crypto investments. 

When it comes to rates of returns, projections or forecasts, these must be adequately explained, including how they are calculated and what conditions apply to returns. Social media influencers and brand ambassadors are also expected to comply with these new advertising standards. To be specific, these individuals will be expected to share verifiable information about cryptocurrencies without offering any advice on crypto trading or investing and without promising any benefits or returns.

Crypto companies in South Africa are on board with the new rules

The Advertising Regulatory Board in South Africa has worked with cryptocurrency exchanges such as Luno and VALR in order to sketch out and implement these advertising requirements. Luno representatives cited by cointelegraph.com revealed that the industry is looking to take a self-regulatory approach in order to make sure that consumers are well-informed of the risks involved in cryptocurrency investing. 

Binance representatives cited by the same source also expressed their support for the new ARB guidelines on cryptocurrency advertising. They also emphasised South Africa’s past turbulences by mentioning misleading communications and the need to set a clear standard for advertising going forward.  

ARB officials expressed their belief that the project will end up protecting vulnerable consumers in South Africa. They also applauded the local efforts by crypto companies and exchanges to support the initiative and solve the problem without being forced to do so by governmental agencies.