Advertise for crypto? Change may be on the horizon

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Editors and sellers, beware: there could be a new set of regulations regarding cryptocurrency advertisements. As many crypto companies go bankrupt, Congress is looking to warn potential customers of investment risks by adding more transparency to the category. Cryptocurrency scams, promising big returns, have become a favorite method for scammers, with an estimated $1 billion lost to cryptocurrency fraud last year.

The Responsible Advertising of Digital Assets Act calls on crypto companies to disclose financial compensation given to influencers and celebrities for promoting crypto assets, which would include on-air talent. Other stipulations in the law would require advertisers to add a disclaimer stating that past crypto performance is not indicative of future returns and to disclose all hidden fees and charges.

Violations would result in fines of up to $100,000 for first offenses and $1 million for subsequent offenses. Violators may also face potential restrictions on selling crypto assets in the future. While the bill has yet to be introduced in the House, the Federal Trade Commission (FTC) has been investigating potential misconduct by crypto companies and cracking down on fraudulent practices.

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