South Africa’s  Advertising Regulatory Board (ARB) has added a new provision for the cryptocurrency sector to shield consumers from unethical advertising.

Companies and individuals in South Africa must abide by certain advertising standards pertaining to the provision of cryptocurrency products and services in a new clause introduced to Section III of the country’s advertising code.

According to Cointelegraph, the first clause requires that adverts, including cryptocurrency offerings, must expressly and clearly state that investments may result in the loss of capital as the value is variable and can go up as well as down. Furthermore, adverts must not contradict warnings about potential investment losses.

Additionally, advertising for particular services and products must be explained in an easily understandable manner for intended audiences. Adverts must also give balanced messages around returns, features, benefits, and risks associated with the associated product or service.

Rates of returns, projections, or forecasts must also be sufficiently substantiated, including how they were achieved and the conditions in which the proclaimed returns were made.  Any information relating to past performance cannot be used to promise future performance or returns, and should not be presented in a way that creates a favorable impression of the advertised product or service.

Advertisements for cryptocurrency services from companies that are not authorized credit providers shouldn’t promote buying cryptocurrencies using credit. However, this does not prohibit service providers from advertising the associated payment options they offer.

Social media influencers and brand ambassadors will also be expected to comply with certain advertising standards. This includes 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.

Cointelegraph also reported that cryptocurrency exchange Luno, a prominent service provider in South Africa, spearheaded the project with the ARB. Luno’s General Manager for Africa Marius Reitz stated that the exchange approached the regulatory body to develop new rules alongside major players in the local crypto industry.

Reitz emphasized that the industry is looking to take a self-regulatory approach and that consumers should be cognizant of the risks involved in cryptocurrency investing. Scams and frauds have preyed on unsuspecting investors in the country, necessitating an effort to ‘clean up the industry by making it more difficult for scammers to operate

“Media platforms are understandably looking for advertisers, but we were concerned that they weren’t doing sufficient due diligence on whether advertisers were above board,” Reitz stated.