Crypto Asset Intermediary Advertising Vendor

Compliance

As mentioned, legal requirements apply to anyone who advertises their services as a crypto asset intermediary or who communicates information about crypto asset-related services to the general public. Each advertisement must be approved by an officer of the crypto asset intermediary to verify that all advertising regulations have been followed. Furthermore, the approval process must be multi-step and supported by written procedures and documentation. These procedures must include stipulations for:

• Educating and training applicable employees on the regulations related to crypto asset advertising
• Documenting the education and training provided
• Monitoring employees to ensure they are complying with all regulations

Carefully-planned procedures are just the first step in compliance. Crypto asset intermediaries are also required to keep detailed records related to each of their advertisements, and they must maintain these records for at least five years. Advertisement records must include:

• A copy of the advertisement
• The dates of the first and last (when applicable) use of the advertisement
• The name of the approving officer of the crypto asset intermediary
• The date on which approval was granted
• Sources for any data, statistical tables, graphs, charts, illustrations, or outside information used in the advertisements
• A copy of any performance rankings or comparisons that might have been used in creating the advertisement

Finally, there are regulations relating to the advertisements themselves, how they are made, and what they may contain. Some of these regulations are:

• Being “based on principles of fair dealing and good faith”
• Providing a “sound basis” for evaluating facts relevant to the specific crypto or asset or type of crypto asset, or the industry or service being advertised
•  Not omitting any material fact or qualification that could therefore cause the advertisement to be misleading
• Not making false, promissory,  exaggerating, or misleading statements or claims
• Ensuring that any information placed in a legend or footnote does not inhibit understanding of the advertisement
• Verifying the advertisement is consistent in its mention of existing risks relevant to the subject of the advertisement, including in mentions of volatility of value, amount of prospective returns, and the operational risks of crypto asset intermediaries
• Considering the nature of the advertisement’s intended audience and providing audience appropriate details and explanations
• Avoiding projections of predictions of performance, implications that past performance will indicate future performance, or exaggerated claims, predictions, or opinions
• Disclosing that the advertisement is governed by federal law and the specific governing section
• Disclosing any existing relationships between people appearing in the advertisement and the crypto asset intermediary
• Disclosing if any person featured in the advertisement was compensated for their appearance
• Disclosing any current registrations, authorizations, or licenses held by the crypto asset intermediary
• Disclosing which taxes apply or do not apply when making any reference to tax-free or tax-exempt income, except in instances when income is completely free from taxation
• Not referring to or characterizing income as “tax-free” or “tax-exempt” when tax liability is postponed or deferred
• Complying with any further standards that may be applied
• Properly disclosing, with “proper” disclosement depending on the type of advertisement, any relevant bank fees, custody fees, or account fees
• Ensuring that any testimonials in the advertisement which concern a technical aspect of entering into a cryptocurrency transaction or purchase are made by a person with the knowledge and experience to state a valid opinion. Such testimonials should also clearly disclose that the experience of the speaker may not represent the experience of other customers, that the testimonial is not a guarantee or promise of success, and, in cases where more than $1000 is paid for the testimonial, the payment amount and type. When compensation is made via crypto assets, the specific asset should also be identified.
• Ensuing advertisements that contain recommendations to enter into crypto transactions have a reasonable basis for the recommendation and that they disclose if the crypto asset intermediary is currently conducting trading activities. Advertisements must also disclose, when applicable, that the crypto asset intermediary is directly involved in the preparation of the advertisement and its content, has a financial interest in the recommended products, and whether that financial interest includes any options, warrant, right, future, or long or short position, unless the financial interest is nominal.
• Avoiding referring, directly or indirectly, to past recommendations that were or would have been profitable, except when referring to all past recommendations made for the same type of crypto assets within one year prior to the date of the release of the advertisement. In these instances, the crypto asset intermediary must state: the name of each recommended asset, the date and nature of each recommendation, the market price at the time of the recommendation, the price at which the person was meant to act upon the recommendation, and the market price of each crypto asset at the most recent practicable date. Additionally, crypto asset intermediaries must prominently feature the following warning: ‘It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the crypto assets in this list.”
• Providing or being willing to provide, upon request, sources or information used in making any recommendations
• Providing the prices of any recommended crypto assets as of the date of the recommendation.
• Following all of the above recommendation rules when sponsoring or participating in a seminar, broadcast, forum, or public appearance or speaking opportunity.
• Creating and adhering to written procedures relevant to public appearances

Expert Assistance

As you can see, the regulations that a crypto asset intermediary faces are immense. With so many laws, it’s all too easy to overlook something and find yourself facing harsh consequences. Luckily, if you partner with C0MPLÉX1, you won’t have to memorize every single item from this immense list of compliance requirements. Instead ,we can do the hard work of creating your advertisements, ensuring they comply in every area and facet, and in making them as effective as possible. We’re also skilled at crafting advertisements that appeal to your intended demographic. Furthermore, we invest real time in understanding your organization and its goals in an effort to create targeted ads that are designed to help you achieve your key objectives.

Our team has decades of combined digital marketing experience and is based in both the United States and El Salvador. Our international content writers, graphic designers, marketers, SEO / SEM experts, web designers and developers, and other seasoned professionals can assist you with all of your crypto asset advertising needs. We also speak both English and Spanish and can work with intermediaries of all types and experience levels. Our goal is to help you get and stay compliant, achieve success, and unlock your organization's full potential. No matter where you are on your crypto asset intermediary journey, we can meet you where you’re at and help propel you toward greater heights.