South Africa Enacts Regulations to Stop Misleading Bitcoin Advertisements
The South African Advertising Regulatory Board has put forth new rules for advertising bitcoin-related products or services, which fall under Section III of the country’s advertising legislation. These regulations are in place to shield consumers from any potentially misleading or fraudulent advertising in the bitcoin industry by mandating that all advertising be held to high ethical and transparent standards.
To comply with the new regulations set by the South African Advertising Regulatory Board, all advertising related to bitcoin-related products or services must be presented clearly and transparently. This includes providing all relevant information about the advertised product or service, including its pros and cons.
The advertisements should be targeted to the intended audience and presented in a format that is easily understandable. By following these guidelines, consumers will be given a comprehensive and unbiased understanding of the advertised product or service, allowing them to make informed decisions.
Companies that are not legally recognized as credit providers should not promot the use of credit to buy digital currencies, but they can still suggest other forms of payment. On the other hand, individuals with a large social media presence who act as brand ambassadors are subject to strict advertising restrictions. These guidelines prohibit giving advice or making false statements about digital assets, including predictions of profits or returns, and require them to be truthful and upfront about facts
Luno Partners with ARB to Regulate Cryptocurrency Industry in South Africa
In an effort to establish clear guidelines for the cryptocurrency industry in South Africa, Luno, a South African cryptocurrency startup, has partnered with the Advertising Regulatory Board (ARB). Marius Reitz, the Director of Africa at Luno, has led the collaboration which includes key players in the local cryptocurrency industry to develop these criteria.
The cryptocurrency business is moving toward self-regulation, according to Marius Reitz, Luno’s General Manager of Africa, and individuals should be made aware of the hazards connected with investing in bitcoin. He acknowledged the country’s prevalence of fraud and scams and claimed that the effort intends to improve the industry’s reputation by making it more difficult for fraudsters to operate.
The issue was that, despite their reliance on advertising funds, media platforms were not taking necessary efforts to verify that the companies with which they partnered operated ethically and lawfully. The ARB project also featured VALR, a well-known South African bitcoin exchange. According to Farzam Ehsani, CEO of VALR, certain bad actors have leveraged the anonymity of the crypto space to perpetrate crimes, leading industry supporters to join together and solve the issue.
VALR Aiming to Create Worldwide Financial System
According to Ehsani, VALR is aiming to create an united worldwide financial system, and enforcing advertising laws is one step toward that goal. According to a Binance representative, the company’s operations in the region meet the ARB’s guidelines for cryptocurrency advertising. They underlined the necessity of providing the public with accurate and truthful information, adding that it is a major priority for the organization. Previous industry issues in South Africa, according to the Binance spokesperson, are additional arguments for supporting these measures.
According to Gail Schimmel, the head of ARB, the project’s purpose is to improve the protection of vulnerable clients in South Africa. She acknowledged earlier instances of deceptive advertising and indicated her support for any legislation that sets clear criteria for future advertising.
Mirror Trading International, which generated a sensation in South Africa in 2020 and 2021 when its CEO, Johan Steynberg, went missing with wallets containing around 23,000 Bitcoin (BTC) belonging to thousands of investors, is one of the most recent incidents of cryptocurrency fraud. To avoid such circumstances, companies in this industry must take responsibility for self-regulation.
When a company takes the initiative to self-regulate and prevent harm rather than relying on government intervention, it is admirable. Another South African investment scheme, Africrypt, failed in 2021. The Cajee brothers, Raees and Ameer Cajee, claimed that the fund lost approximately $200 million in cryptocurrency due to a cyber attack.
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