As the crypto ecosystem continues evolving, the global regulators have stepped up to shield customers from unlawful activities. In a Monday, April 29 report, the Securities and Exchange Commission (SEC) revealed plans to protect the Thai crypto enthusiast from fraudulent schemes.
The Thai SEC will target crypto firms that promote fake advertisements on digital assets. The regulators urged the local and offshore exchanges to adhere to the Thai advertisement standards.
Thai Impose Restrictive Advertisement Measures
The warning came when criminals were developing fake promotions to hype crypto projects. Unknowingly, the customers fell for the scammers trap and invested in the dubios schemes only to suffer huge losses. To prevent financial losses, the Thai SEC has upped the game to address fake ads that mislead customers.
In a statement, the deputy secretary general, Anek Yooyuen, stated that the regulators are concerned about crypto exchanges offering rewards and promises as a way to attract more clients.
The executive noted that crypto firms use a unique approach to onboard new users. Yooyuen pointed out that some of the promises offered by crypto exchanges are false.
Citing the existing regulations, Yooyuen stated that violating any advertisement requirement will be punishable by law. He urged businesses to follow the existing rules when developing advertising materials or presentations to avoid being punished.
Yooyuen added that the existing rules aim to protect consumers from misleading information and address the risk of scams.
Investors Suffer Losses from Fake Crypto Ads
In a subsequent report in the Bangkok Post, Thai regulators stated that fake information in crypto advertisements contravenes the law. The regulators noted that to attain a specific objective, some of the crypto firms are developing ads to lure customers to their deceptive projects.
The announcement demonstrated Thai commitment to addressing financial crime. The regulators urged crypto firms to refrain from promoting fake ads that contain exaggerated content.
In the report, the financial regulators advised the crypto firms to consider disclosing vital information concerning a particular product or service. This implies that the crypto firms should provide a summary of the product and the risks involved in investing in the product.
The regulators argued that ads should inform and educate the user the product or service. Guided by the existing rules, the SEC anticipates that the crypto ad should enable the consumer to make informed decisions concerning an investment product or service.
The regulators warned promoters from pressuring the customers to acquire products under promotion. The Thai warning comes at a time when global regulators are taking action against non-compliant promoters and influencers.
Rise of Financial Crime
In October, UK financial watchdogs imposed restrictive measures on firms that promoted the products. The new provision requires crypto firms to be authorized by the Financial Conduct Authority (FCA) to promote their products within the UK.
The new rules aim to prevent businesses from misleading customers using fake ads. The FCA believes the new advertisement rules will promote fairness and transparency in the financial sector.
The FCA enforcement action against crypto firms mirrors the step taken by the Spanish National Stock Market Commission. On X, the commission outlined the fake crypto promotions shared on various social media platforms.
The regulators underscore the need for crypto firms to comply with the Spanish regulations. A few weeks ago, the bad actors used Etherscan to promote their fraudulent schemes.
According to a report, criminals exploited Etherscan to advertise their unlawful activities on the website by sharing links requiring customers to provide their wallet information. The Etherscan scandal attracted the attention of leading blockchain analytical firms such as Scam Sniffer to probe the case.
The Scam Sniffer noted that Etherscan lacked adequate advertising aggregators to filter suspicious ads. This enabled the criminals to advertise their phishing links on Etherscan to entice the customers into their schemes.
The probing team observed that the phishing links shared with the Etherscan community enabled the scammers to access customers’ funds illegally.
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