When we think of legal compliance in the crypto industry, we tend to assume that this applies to the products and services themselves. Usually, the media focuses on crypto tokens and other products coming under scrutiny from regulators and even facing legal action, in some cases. But believe it or not, crypto marketing compliance is also an important factor.
At the end of the day, press releases are considered legal documents, as they serve as evidence for certain developments, a means to inform the public of these, and much more. The growth of the crypto industry means that there is more attention on the press releases. As such, any business putting out these releases has to be very cautious to not get into hot water and stay on the right side of regulators.
Why Press Releases Fall Under Marketing Regulations
Much of the legal action taken against crypto companies has to do with their marketing efforts. As digital assets have gained more popularity, crypto marketing compliance has become a bigger deal. The language used in these marketing efforts is now guided by strict laws, and press releases fall under this. As we’ve explained in a previous article, press releases are both legal documents and a form of marketing. With this comes the risk of breaking laws.
First, there is the risk of misleading information. While every crypto business will want to use press releases to uplift their product, making any exaggerated or misleading claims could be the catalyst for legal repercussions. Statements made about other projects could also be considered libel. So while crypto businesses should make the most of their press releases, crypto marketing compliance should remain at the forefront.
Rules to Follow in Crypto Marketing
When publishing press releases for crypto marketing, make sure that you adhere to the following guidelines.
Avoiding Investment & Profit Language
As much as you want people to buy into your crypto project, you cannot make promises about the profit you will deliver. One of the golden rules of advertising financial products, including cryptos, is that you cannot guarantee a percentage or amount in profit. If anything, many crypto products put disclaimers about how there is a risk involved in investing in crypto.
While the upsides and potential of the crypto project should be highlighted, it should not be touted as the next big token that you have to get in on. The language should also not be sensationalized and veer towards the realm of exaggeration.
Proper Risk Disclosures in Crypto Press Releases
One of the easiest ways to stay on the right side of the law with crypto press releases is to disclose the risk of loss. At the bottom of the press release, make sure you state that investors run the risk of losing some or all of their investment and that nothing is guaranteed. Go a step further and make this a part of all of your crypto marketing efforts.
When you publish articles on websites, make sure the same disclosure is given. You should also publish it on your website, on your sales page. Many crypto projects even add a terms-and-conditions clause that customers must agree to before making a purchase on their website. This protects from any future liability.
Jurisdiction & Regulatory Awareness
As with anything that has to do with compliance, much of crypto marketing depends on where exactly you find yourself. Before you even develop your press release, you’re best off looking into the crypto compliance laws in the areas you are targeting. This will let you know what language is allowed, how crypto is legally classified, and much more.
Another idea would be to have your press releases reviewed by a crypto compliance officer. This will help flag any apparent issues and stop you from attracting the ire of regulators.
Transparency Requirements in Token Marketing
Depending on where you operate from, certain transparency requirements must be met when promoting a crypto token. In some places, you have to be transparent about the issuer of the token and provide proof of reserves. A whitepaper is also required to prove the existing network, tokenomics, smart contracts, and much more.
Speaking of smart contracts, an independent audit is becoming a standard part of advertising a crypto project, so keep this in mind. All of these have to be disclosed in your press releases and on your website to satisfy your customers and regulators.
Influencer & Paid Promotion Disclosure Rules
One of the most common instances of crypto businesses getting into trouble with regulators is non-disclosure of partnerships with influencers and other Key Opinion Leaders (KOLs). When someone is compensated, financially or otherwise, to promote your business, they have to disclose to the public. Failing to do so can and has attracted hefty fines.
As part of your influencer marketing contracts, demand that they disclose the paid nature of the partnership to their audience. This will keep you both on the right side of the law, and this applies to sponsored posts on websites and any other form of promotion.
Avoiding Market Manipulation & Hype Risk
The last thing you want as a crypto business is facing accusations of market manipulation or being a pump-and-dump scheme. Luckily, a great way to avoid this is to not overhype your project even in the course of crypto marketing.
Highlight its upsides, but don’t promise anything you can’t fulfill.
Intellectual Property & Brand Usage Compliance
When using intellectual property within your crypto marketing efforts, make sure you comply with all copyright and usage laws. As we’ve noted in a previous blog post, choosing royalty-free images and videos from stock websites or creating your own is a safer bet than using random ones you don’t have concrete permission for.
Make sure you adhere to all copyright laws to avoid legal action that can slow down your crypto marketing efforts or cost you hefty fees.
Best Practices for Compliant Crypto Press Releases
Creating crypto press releases that adhere to regulatory requirements and are effective can be done in a few steps:
- Review existing regulatory measures in your specific jurisdiction. These differ from one place to another, so don’t assume that anything applies to you.
- Place clear disclaimers about the risks involved in cryptocurrency in all of your press releases.
- Do not make any promises regarding profit or return on investment. As with any financial instrument, cryptocurrency cannot guarantee any returns.
- State only very clear facts within the press releases, as it is a legal document. While you might want to hype up your project, do not make any claim that you cannot defend in court.
- Use the Reverse Pyramid method and make sure the most important information is in the first paragraph.
- Only use images, videos, and other such creative assets that you have the copyrights to.
- Have a crypto compliance expert review every press release before publication.
Common Compliance Mistakes in Crypto Press Releases
It is also important to be aware of the common compliance mistakes companies make when putting out crypto press releases:
- Not clarifying compliance rules before publishing releases
- Exaggerating the potential of their product to the point that it is misleading
- Not adding necessary disclaimers
Conclusion
As much as you want a crypto press release to be effective, it also has to be compliant. Running afoul of compliance laws can see your campaign impacted, legal action taken, and a stain on your reputation that is hard to remove. Consider some of the tips we’ve offered in this article, and contact us via email and Telegram to craft the best, compliant press releases possible.