South Africa’s New Laws to Stop Crypto Scams

south africa crypto laws

In an effort to protect consumers from unethical advertising, South Africa’s Advertising Regulatory Board (ARB) has implemented new guidelines for the advertising of cryptocurrency.

The new rules, included in Section III of the country’s advertising code require that all crypto ads must explicitly warn potential buyers that investments may result in the loss of capital and that adverts must not contradict these warnings.

The Advertising Regulatory Board has published an email notice with the title “CODE OF ADVERTISING PRACTICE” in a pdf.

South Africa Crypto Advertising Rule

First of all, the requirement for crypto advertisements to clearly state that investments may result in the loss of capital will protect consumers from false or misleading information.

This will prevent individuals from being lured into investing in crypto without fully understanding the risks involved.

South Africa Advertising Regulatory Board
Read the Full PDF Here

Secondly, the guidelines also ensure that advertisements for crypto products and services are presented in an easily understandable manner for the intended audience.

This will help to prevent confusion and misunderstandings and will ensure that consumers are provided with accurate and relevant information.

Thirdly, the guidelines also stipulate that rates of returns, projections, or forecasts must be adequately substantiated and that any information relating to past performance cannot be used to promise future performance or returns.

This will help to prevent unrealistic or false promises from being made and will protect consumers from being taken advantage of by unscrupulous companies or individuals.

Also, the guidelines include regulations for social media influencers and brand ambassadors, which will help to prevent the spread of false or misleading information through these channels.

This will help to prevent individuals from being misled by influencers who may have financial incentives to promote certain crypto products or services.

However, this does not preclude the advertising of associated payment methods provided by service providers.

Social media influencers and brand ambassadors will also be expected to comply with certain advertising standards, including being required to share factual information.

While being prohibited from offering advice on trading or investing in crypto assets and the prohibition of promises of benefits or returns.

The ARB chief executive Gail Schimmel said, “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 government intervention.

South Africa is taking a proactive approach in this regard, with its Advertising Regulatory Board implementing new guidelines for advertising crypto products and services.

The move comes as other countries, such as the United Kingdom, are also considering legislation to curb misleading crypto promotions.

In the United States, high-profile individuals like reality TV star Kim Kardashian have been held accountable for promoting cryptocurrencies without disclosing payment.

Kardashian recently settled with the Securities and Exchange Commission for $1.26 million in a case involving the promotion of EthereumMax.

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