Explained: Why some countries are banning crypto advertisements

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Despite immense popularity, the cryptocurrency market remains unregulated in many countries. This leaves investors vulnerable to various scams and frauds.

Misleading advertisements is one such menace that can result in some investors losing their hard-earned money.Sensing the urgency of the matter, some governments across the world have now planned to crack down on such misleading crypto advertising and bring in some rules to ensure gullible investors are not duped.Before we take a look at the countries that have stepped up to protect consumers from such ad-based scams, let’s find out why these ads can prove risky.Also Read: Russia proposes ban on use and mining of cryptocurrenciesWhat is the problem with crypto advertising?Cryptocurrencies are highly volatile and trading in them, without a proper understanding of the market dynamics, can be risky, as is the case with many other assets. Advertising, particularly those promoting specific crypto products or companies, can prompt people to start trading impulsively, which can lead to losses.As pointed out to Forbes by Kathy Kraninger, a former US Consumer Financial Protection Bureau director who recently joined the leadership team of crypto risk monitoring firm Solidus Labs: "Many of these ads are designed to create FOMO, and rightfully so, the crypto space is a very dynamic place with ample opportunity.