New advertising rules require warning label over crypto investments
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Loading... - Gabriella Ebrahim
- 30 Jan 2023
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Must clearly state that investing in crypto may result in loss of capital.
The Advertising Regulatory Board (ARB) has introduced new rules warning crypto investors about the potential for loss of capital.
Crypto advertising must be simple to understand for the target audience, and give a balanced message about the returns, features, benefits and risks associated with the product or service.
The change to the board’s Code of Advertising Practice is aimed at protecting consumers from being misled by unethical advertisers and are the result of consultation and agreement with the cryptocurrency industry.
Industry players hope this will make it harder for scams such as Mirror Trading International, which promised returns of 10% a month, to gain traction.
In terms of the new rules, advertising that mentions rates of return, projections and forecasts must be supported by adequate substantiation as to how these are calculated.
Advertisements must clearly state that investing in crypto assets may result in the loss of capital as the value is variable and can go up as well as down.
The rules state that any historical period or past performance “should not be presented in such a way that it creates a favourable impression of the advertised product or service”.
In addition: “Advertisements by crypto asset service providers who are not registered credit providers should not encourage the purchase of crypto assets on credit. This does not preclude advertisements providing information about the payment methods offered by crypto asset service providers.” Read More…
