A web3 venture involves following a complex set of crypto-marketing rules globally. Founders are often not fully prepared for the regulatory challenges. These guidelines will help mitigate common issues and avoid major risks. This document is not legal advice and does not cover all aspects, but it clearly explains the main rules to follow. Our previous article covered one side of crypto marketing. This document offers more detailed material to guide your marketing efforts further.
General Recommendations
Ensure that all information provided is honest and easy to understand. Avoid using complex language; instead, present information in a straightforward manner. Tailor your messages to suit the knowledge level of your audience. Provide enough information for informed decision-making, and never hide critical details.
Explain Risks Clearly
Always present a balanced view of risks and potential returns. When discussing returns, include the associated risks. Do not downplay the risks of dealing with cryptoassets, as transparency is crucial.
Avoid Exaggeration
Refrain from making unrealistic claims. All assertions must be backed by verifiable evidence to maintain credibility and trustworthiness.
Include All Fee Information
Clearly state all costs, fees, and charges. If there are complex fee structures, provide detailed information to ensure complete transparency.
Use Accurate and Current Information
Ensure that all facts, figures, and statements are up-to-date and correct. Avoid using misleading graphics or images, and always include a publication date with any piece of information.
Use of Terms like "Guaranteed" or "Secure"
These terms should only be used if they are accurate and verified. Provide all necessary information to explain these terms clearly to avoid any misunderstandings.
Highlight Informational Nature
Always clarify that the information provided is for informational purposes. Make it clear that users should perform their research or consult with a financial advisor before making any decisions.
Avoiding Financial Terminology
When a project involves financial activities, investment implications, or similar elements, and a project is uncertain about the appropriate jurisdiction for licensing or registration, it is crucial to avoid language that could trigger the application of financial or securities laws.
To ensure compliance, avoid the following terms and phrases:
Investment Advice Avoid terms like "investment advice," "investment strategy," or "investment recommendations." Instead, use "informational service" or "educational content." This ensures the information is understood to be for informational purposes only.
Financial Planning Refrain from using terms like "financial planning," "wealth management," or "financial strategy." Use phrases like "general financial education" or "financial literacy content" to avoid the implications of personalized financial planning.
Securities Implications Do not use language that suggests the offering of securities, such as "equity," "shares," or "dividends." Instead, describe your offerings as "digital assets" or "utility tokens," if applicable, making it clear that they do not confer ownership or profit-sharing rights.
Guaranteed Returns Avoid statements that imply guaranteed returns or risk-free investments, such as "guaranteed profit," "risk-free investment," or "secure returns." Use disclaimers and emphasize risks.
Personalized Recommendations Do not provide specific actions for individual users, such as "you should invest in this" or "this is the best option for you." Offer general information applicable to a broad audience, like "explore various options based on general criteria" or "consider different strategies based on risk tolerance."
Financial Terminology in Marketing Ensure that marketing materials do not include terms that could be interpreted as financial promises or advice. Avoid phrases like "maximize your investment" or "secure your financial future." Stick to neutral language focusing on education and information.
Inducements
Avoid creating inducements when communicating with users. Inducements are steps that persuade or encourage someone to engage in specific activities. Refrain from using high-pressure sales tactics that force users into making quick decisions, such as, "Hurry, invest now, or miss out forever!" Always consider whether your message significantly encourages clients. When in doubt, avoid language that directly invites or strongly persuades someone without appropriate disclaimers.
Promoted Materials
Clearly label all promotional content with "Sponsored" or "Advertisement" to inform viewers of the endorsement's nature.
Influencers
Influencers should always disclose paid relationships or conflicts of interest. They must ensure that endorsements are truthful and not misleading. They should disclose that the endorsement is part of a paid partnership.
Profit and Value Statements
Do not state that a native token will share any profits or upside. Avoid discussing how a native token could increase in value. Do not promise profits.
Discourage Speculative Behavior
Do not encourage "buy low, sell high" behavior. Do not promise any value growth, even indirectly.
Stick to Facts
Only share objective, factual information when a user inquires. Use neutral, informative language. Avoid speculative statements or any language that could be interpreted as promoting an investment.
Conclusion
Adhering to these marketing guidelines will help crypto entrepreneurs navigate the complex regulatory environment and foster trust with their audience. Of course, these guidelines are not exhaustive and cover only several core aspects, but they can still be helpful as basic rules to adhere to. Always remember to consult with legal and financial professionals for comprehensive compliance and to stay updated with the evolving regulations in the crypto space.
Prokopiev Law Group has a broad global network of partners, ensuring your compliance worldwide. For more information, write to us, and we'll assist you in staying ahead in the dynamic world of Web3 and crypto regulations.
The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.
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