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Cryptocurrencies are highly volatile. Trading in these assets without a proper understanding of the market dynamics can be very risky. Advertisements promoting specific crypto products can prompt people to trade impulsively. This leads to losses. Some governments across the globe are planning a crackdown on such misleading crypto advertisements. Virtual currencies are condemned because of their fluctuation, being used in shady transactions, and mass utilization of power generation in the mining period. They are however perceived as a thing of refuge throughout financial downpours. The cryptocurrency market is not regulated in many countries leaving investors vulnerable to fraud and scams. Countries where cryptocurrency is illegal include Bolivia, China, India, Iran and Egypt among others. Algeria has banned cryptocurrency recently following a financial law passed in 2018. Misleading advertisements are risky to investors and can lead to losses. As Kathy Kraninger from crypto risk monitoring firm Solidus Labs pointed out to Forbes, ''Many of these ads are designed to create FOMO, and rightfully so, the crypto space is a very dynamic place with ample opportunity. However, it is important to remember that FOMO often contributes to fraud, since it pushes consumers and investors to make decisions quickly.'' This could be the reason behind countries like Singapore, the UK, and Spain taking measures to regulate crypto advertising space. Therefore, it's no wonder that these countries are also amongst the ones that have strict crypto ad laws in place to curb misleading ads.
Countries Regulating Crypto Ad Space Through Tough Crypto Ad Laws-
The following countries have restricted advertisements strictly due to different reasons:
Turkey
Many people in Turkey turned to Bitcoin when the Turkish Lira fell in valuation. The introduction of restriction took place because the price level of Bitcoin reached its peak. The Central Bank harshly restricted the utilization of virtual transactions in mid-2021. President Recep Tayyip went further and issued an edict that added cryptocurrency transaction institutions to a list of businesses associated with anti-money illicit activity. Displaying crypto advertisements in Turkey is one of the highest criminal activities.
United Kingdom
Advertising Standards Authority (ASA) in the UK has had wrangles with cryptocurrency companies like crypto.com regarding misleading advertisements. This has prompted the UK government to look into introducing broader legislation. The Chancellor of the Exchequer, Rishi Sunak, has hinted at plans to bring crypto ads under UK's Financial Conduct Authority together with other financial promotions. The UK government focuses on bringing crypto-asset promotions under financial promotion legislation. It believes that these regulations will support the crypto-asset market innovation. They want to implement the much-needed regulations in crypto investment advertising instead of banning crypto trading activities.
Spain
In Spain, crypto firms wishing to advertise their services and products have to follow new rules. Spain's financial regulator, Comision Nacional del Mercado de Valores (CNMV) announced new rules for crypto investment ads. The rules were affected in February this year. The crypto advertisements are required to provide sufficient information on the risk of any crypto investment. The ad should also be balanced, clear, and fair. The CNMV has also to be informed 10 days before releasing an ad that targets at least 100,00 people. The regulators will supervise the ad activities. Influencers, celebrities, and third parties ad providers must follow all the stipulated rules. The regulators also need the ads to contain a snippet informing the audience that crypto ads are not regulated. It should also have a warning that the money invested may be lost. All advertisements are also required to have links to extra information that could help new investors. These rules focus on crypto-assets advertisements. It is a step toward regulating the crypto industry in Spain.
Singapore
Singapore has taken the most stringent measure by banning crypto advertising in public areas and social media that targets the general public. The Singapore Monetary Authority released a new set of guidelines on the provision of Digital Payment Token Services to the public. The ban applies to crypto exchanges, banks, and financial institutions licensed to provide crypto services. These rules also ban payments of influencers or third parties promoting their services or crypto trading.
China
The cryptocurrency advertising policy in China has been restricted by the government. All through 2021, China increased its crackdown on digital assets including Bitcoin. The Chinese government has put harsh restrictions on processing and cryptocurrency exchange mechanisms in China and abroad. It has consistently notified the citizens to avoid the technology platform sector. The PBoC has prohibited cryptocurrency transfers in the nation.
The Final Word
In most parts of the world, cryptocurrency legal countries list 2022 comprises many nations. However, cryptocurrency regulations around the world have been levied. This is to safeguard the masses from losses that might lead to financial instability among the people. Experts have warned investors to avoid taking hasty decisions and exercise caution while investing in crypto. Some governments like the US have issued crypto regulations in 2022 to ensure the responsible development of digital assets. The need to regulate crypto ad through laws has increased after many people fall victim to scams due to advertisements. Investors should execute due diligence and make thoughtful decisions on how and when to engage with crypto markets.