South Africa’s Advertising Regulatory Board (ARB) has introduced a new clause to the country’s Code of Advertising Practice detailing how crypto products should be dealt with.
ARB says that the new rules are aimed at protecting consumers from being misled by unethical advertisers and are the result of consultation and agreement with the cryptocurrency industry.
The new clause elaborately explains how advertisers should craft their message ensuring minimal or no harm to the end consumer.
Part of the new regulation states ”Advertisements must 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. The wording should be, or should communicate the same.”
The move has been applauded by various stakeholders who view it as a self-regulation mechanism that should be encouraged.
“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 the government,” says Gail Schimmel, CEO of the ARB. “This has been an exciting project and we know that it will result in better protection for vulnerable consumers.”
The new regulation further directs that influencers used to promote crypto trading must always give factual information. This is in recognition of the role that influencers play in the digital era to promote various products.
“The influencer or ambassador may share factual information only. Influencers and ambassadors may not offer advice on trading or investing in crypto assets and may not promise benefits or returns.”
South Africa is among the leading cryptocurrency markets in Africa alongside Kenya and Nigeria. Reports indicate that crypto transactions were averaging $20 billion per month in mid-2021.
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