The South African self-regulatory body, the Advertising Regulatory Board (ARB) updated its Code of Advertising Practice to include a new section dealing with crypto assets (Clause 17 in Section III).
Crypto asset advertisements must:
- expressly and clearly state that investing in crypto assets may result in the loss of capital. The overall message of the advertisement must not contradict this warning.
- explain the product or service in a way that is easily understandable for the intended target audience.
- give a balanced message about the returns, features, benefits and risks.
- hold up to date documentary evidence to support any rates of return, projections and forecasts, including how it is calculated and significant conditions that apply.
- make it clear that past performance presented is not indicative of future performance nor indicative of favourable outcomes.
- comply with the Social Media Code (Appendix K) when using influencers or ambassadors to promote a crypto asset product. Influencers or ambassadors may not offer advice for trading or investing in crypto assets and may not promise benefits or returns.
Crypto asset advertisements should not:
- be framed so as to abuse the trust of the consumer or exploit their lack of experience, knowledge or credulity;
- contain any statement or visual presentation which is likely to mislead the consumer;
- encourage the purchase of crypto assets on credit (unless advertised by a registered credit provider).
The aim of these rules are to prevent consumers from being misled when dealing with crypto asset services and products. Consumers and companies may complain about non-compliant adverts here.
These developments follow from the FSCA’s declaration of crypto assets as financial products on 19 October 2022.