South Africa obliges celebrities to refrain from bogus crypto claims

Crypto Regulation
South Africa obliges celebrities to refrain from bogus crypto claims

The Advertising Regulatory Board (ARB) of South Africa has released an updated code of advertising practice for crypto market participants. Under the new guidelines, advertisers must clearly state that investing in bitcoin (BTC) and altcoins is risky and may result in capital loss.

Crypto businesses must send clear risks warnings 

Indeed, 2022 was a tumultuous year for the global crypto space, as the steep drop in the price of bitcoin and other cryptocurrencies, coupled with wanton customer funds mismanagement and alleged fraudulent practices by the likes of Sam Bankman-Fried’s FTX, led to countless high-profile bankruptcies across the board.

As the global crypto markets begin to show signs of recovery, with their combined market capitalization now above the $1 trillion mark, the South African Advertising Regulatory Board (ARB) has released new guidelines for digital asset businesses.

According to the ARB Code of Advertising Practice document, crypto advertisements published by market participants must “expressly and clearly” state that crypto assets are risky investment vehicles that may result in total loss of capital since their prices are never stable.

“The overall message of the advertisement must not contradict the warning statements. An advertisement for a particular crypto asset service or product must explain the relevant product or service in a way that is easily understandable for the intended audience.”

The Advertising Regulatory Board (ARB) of South Africa

Crypto influencers warned

Importantly, the ARB has also mandated influencers and celebrities, who are increasingly being hired to function as ambassadors of crypto projects, to refrain from making bogus claims about crypto or offering advice. Instead, they should share factual information about the platform.

A good number of crypto-focused businesses have recently come under fire for creating ad campaigns labeled as misleading or deceptive by regulators. Last month, reported that Binance’s French clients filed a lawsuit against the exchange over alleged misleading social media ads.

In Oct. 2022, Hollywood celebrity, Kim Kardashian reached a $1.2 million settlement with the SEC for promoting EthereumMax without publicly disclosing she got paid for the job.

Similarly, top celebrities who once endorsed SBF’s now-defunct FTX exchange recently distanced themselves from the embattled project amidst a barrage of lawsuits.

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Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.