The Securities and Exchange Commission (SEC) has tightened rules on advertising by crypto companies, joining countries like Singapore in seeking to protect retail investors in the wake of a US$2-trillion-selloff in digital asset markets.
Advertisements for virtual tokens must include clear and visible warnings about the risks of investing in cryptocurrencies, the SEC said in emailed statement on Thursday.
Authorities had already telegraphed their intent to put in place more protections for small investors. The new advertising rules come after Zipmex (Thailand), a locally licensed cryptocurrency exchange, and its regional parent last month halted some withdrawals. The parent, Zipmex Pte, was granted three months of protection from creditors by a Singapore court on Aug 15.
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The SEC tightened rules after discovering that some ads contained no warnings about cryptocurrency risks, while other promotions featured only positive information, according to the statement.
Details of the tighter crypto advertising regulations include:
- Advertisements must not feature false, misleading or exaggerated claims
- Warnings of risks must be clear and easy to notice
- The ads must feature balanced views, mentioning both positive and negative factors
- Crypto firms must limit advertising to official channels like their websites
