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- Attempts to sell crypto assets now have specific rules under South Africa’s advertising code, to protect potential buyers.
- Advertisers have to be very clear that tokens such as bitcoin carry the risk of losing your money.
- Influencers, if they are used, can’t make promises about returns.
- Consumers need to have their eyes open when they put money into crypto, say some sellers.
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South Africa’s Code of Advertising Practice, used by the Advertising Regulatory Board (ARB) to ban specific ads or sanction advertisers who overstep, now has a specific section to deal with crypto assets.
And it says those selling bitcoin and its fellow crypto tokens have to be very clear and unambiguous about the risk of losing money.
The section on crypto joins specific rules for a long list of other industries, including work-from-home schemes, charities, property, and cellphone services, which may pose unique risks to consumers if improperly promoted.
The crypto rules were created alongside companies in the industry, lead by Luno, which said it wants buyers to enter the crypto market with their eyes open.
Membership of the ARB is voluntary, and advertisers can choose not to be bound by its rules. But the body has the power to direct its media members to not accept specific ads, to close off distribution even if an advertiser will not comply with its ruling.
Under the new rules, any advert for crypto must carry words at least similar to “investing in crypto assets may result in the loss of capital”. That warning may not be offset by the overall message of the ad.
Other rules hold that:
- any crypto asset or service must be explained “in a way that is easily understandable for the intended target audience”
- benefits and features must be presented balanced against risks
- any claim about returns or forecasts must be backed up by evidence, with explanations of how forecasts are calculated
- a reference to past performance must include the warning that it is not indicative of future performance
- advertising can’t promote borrowing money to buy crypto assets, unless the advertiser is a registered credit provider
If social-media influencers or other ambassadors are used in promotion, they must disclose payment or freebies and steer clear of deception, as in any advertising under general rules. But they are also specifically required, when it comes to crypto tokens, to “share factual information only” – and they may not make promises about returns or benefits.