Cryptocurrency and all the news concerning it has always been in popularity. Its regulation has also been a matter of great importance and controversy. As is common knowledge, cryptocurrencies website are hugely unpredictable and volatile.
The cryptocurrency market is still unregulated in various countries, even with its enormous popularity. It has left the investors at risk of fraud or scams. Various ambiguous advertisements also mislead investors.
Thankfully governments of some countries have understood the necessity of the matter. They have planned to snuff out these ambiguous cryptocurrency advertisements. They are also planning to bring in rules to safeguard innocent investors from misleading.
Some countries have finally taken a step forward to shield users from such frauds based on advertisements. These advertisements can prove very dangerous for the users for various reasons.
Cryptocurrencies are hugely unpredictable and volatile, and dealing in them without complete knowledge of the market’s dynamics can prove very risky. Their case is similar to any other asset. Advertisements that majorly encourage particular products or companies concerning cryptocurrencies can lead to losses. They can elicit people to start dealing in cryptocurrencies instinctively.
It is also stated that a majority of these advertisements are made to produce, what is popularly called, Fear Of Moving Out or FOMO. They depict that the cryptocurrency market is a very dynamic place with plenty of opportunities. What is noteworthy here is that the Fear Of Moving Out or FOMO contributes to scams because it forces investors to act impulsively.
It is the main reason why various countries like the United Kingdom, Spain, and Singapore have taken action to regulate the advertisements concerning cryptocurrency. These countries have taken different types of steps in this direction.
The Advertising Standards Authority, the advertising regulator in the United Kingdom, has had a dispute with cryptocurrency companies concerning ambiguous advertisements. The government of the United Kingdom is planning to introduce more comprehensive legislation. They have charted out plans to bring advertisements pertaining to cryptocurrencies under the Financial Conduct Authority of the United Kingdom in line with other financial advertisements.
In short, the government of the United Kingdom is planning to bring the advertisements of cryptocurrencies under the reach of financial advertisements legislation. They also hold that these regulations will usher innovation in the cryptocurrency market. They also don’t want to put a total ban on trading activities of cryptocurrency.
The government will forward this new legislation soon. They want to protect the users from fraud and support the innovation of cryptocurrencies at the same time.
Spain is taking a more comprehensive approach when the government of the United Kingdom has been snuffing out advertisements and promotions. It has executed warnings in the entire country altogether for the cryptocurrency industry.
Comisión Nacional del Mercado de Valores, the financial regulator in Spain, has announced new cryptocurrency rules of advertising that will be enforced from February 17th, 2022. These regulations will primarily concern famous personalities, influencers, and cryptocurrency companies. According to these regulations, the cryptocurrency advertisements will have to contain a section that warns the users about the risks involved in these trades, along with extra links for additional details. This step would prove very useful for cryptocurrency investors.
As for Singapore, it has taken the most strict action to regulate cryptocurrency advertisements. They have successfully banned cryptocurrency advertising in the public sector and social media that influences the public.
Singapore’s Monetary Authority has introduced a new set of guidelines concerning provisions of digital currencies and assets to the public. This ban will also concern banks and financial entities that are licensed to provide cryptocurrency services and cryptocurrency exchanges. The cryptocurrency companies are also prohibited from paying social media influencers or websites to advertise their cryptocurrency trading and services.
Hence, ambiguous advertisements are a major unknown reason for countries to ban cryptocurrencies. The number of countries that have banned cryptocurrency either totally or gradually has increased more than twice since 2018. Another reason that is cited by various countries is that cryptocurrencies are being used to fund illegal activities and terrorism. Though not all countries have put an outright ban, most of them have taken or are planning to take stringent measures in this direction.
