South Africa’s advertising watchdog has announced new rules for virtual asset service providers (VASPs) to stamp out unethical advertising.
The Advertising Regulatory Board (ARB) announced the new regulations this week, introducing clauses that it says will offer better protection to South African investors.
The @ARB_SouthAfrica has added a new clause to the Code of Advertising Practice for dealing with cryptocurrency products. #SelfRegulation is alive and well in our sector!
For more detail on the regulation, follow this link.https://t.co/CXY3TgNDzC
— ACA South Africa (@ACA_SA) January 24, 2023
The ARB now demands that any digital asset ad “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.”
ARB’s new guidelines align with its peers globally, who are now taking a keen interest in digital asset ads. The days of luring investors with claims of guaranteed 10x returns are firmly behind us. With billions of dollars lost globally to projects that promised the world but failed to deliver, regulators are now out to ensure that VASPs can no longer sell pipe dreams.
In South Africa, VASPs and Bitcoin influencers must clearly indicate that “investing in crypto assets may result in the loss of capital.”
The ARB also demands that digital asset ads explain the product or service in an easily understandable way for the intended audience. This includes offering a balanced message about the returns target clients can expect from their investment, the benefits, and the risks.
South African VASPs will also be prohibited from using past performance to justify their future revenue projections on their ads.
“Any historical period or past performance should not be presented in such a way that it creates a favourable impression of the advertised product or service,” the new guidelines dictate.
‘Crypto bros’ have been calling on investors to sell every other asset and take on loans to buy (and HODL) BTC. In South Africa, such language is now prohibited in ads unless the VASP also offers credit services.
The ARB reportedly worked with industry stakeholders, including South African exchanges, on the new guidelines.
“This is a wonderful example of an industry that sees the harm that could be done in its name, and steps up to self-regulate the issues without being forced to do so by government,” ARB CEO Gail Schimmel stated speaking to one outlet,
Watch: Blockchain in Africa
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