• Atty. Marian Vanslembrouck emphasized that making sure that most marketing materials go through the legal team first before posting them is a must-have habit.
• Captions and statements with emojis that might entice the public ‌to buy a product could also be a red flag in the eyes of ‌regulators and should be avoided, according to the lawyer. 
• To publish a safe and ethical promotion, Vanslembrouck advised just promoting the technicalities of the product, including the technology behind it, the problems that it intends to address, and potential benefits.

In this rapidly evolving crypto space, how can hype and ethics coexist to promote a project? 

Atty. Marian Vanslembrouck, recognized as one of the top in-house legal counsel in the country by The Legal 500 through the GC Powerlist: Philippines 2023 and served as an associate general counsel at Enjin, gave legal tips on how to ethically promote a project to be compliant with existing laws in the country. 

This discussion is part of the 23rd episode of the BitPinas Webcast on September 26, 2023, “Crypto Hype and Influencer Ethics with Atty. Marian Vanslembrouck”.

Should Companies Seek Legal Advice First Before Posting Crypto Promotions? 

Vanslembrouck first shared her experience with Enjin, where she usually checks most, if not all, marketing materials on a day-to-day basis before it will be posted on the firm’s different social media accounts.

And for the lawyer, though different companies have different structures and workflows, making sure that most marketing materials go through the legal team first before posting it is a must-have habit: 

“So if you’re a company that is careful and you want to ensure that you’re in compliance with the law, I would highly recommend that when you actually post marketing material, you run it through your legal department. Especially since the crypto industry right now is actually quite regulated, since it’s a downturn, you have regulators that are trying to look out for consumers.”

Atty. Marian Vanslembrouck

The legal department will also be the one to make sure that marketing material will not overhype the product, according to Vanslembrouck.

Using Emojis: When Do Promotions Cross the Line? 

Overhyping the promotion of the product can then lead a firm to be flagged down by a regulatory agency, Vanslembrouck emphasized.

“I know it’s natural for most of us to be enthusiastic or excited about their products, but we must remember that we must avoid language that would overhype; for example, the potential returns of like the token.”

Atty. Marian Vanslembrouck

Thus, Vanslembrouck advised firms, and even influencers and supporters, to focus on promoting the technical and beneficial sides of a project: 

“So, instead of overhyping that ‘this token will get you 100% return,’ it’s better if you focus on educating your users about the technology behind it, the platform, all the problems that it intends to address, and potential benefits.”

Atty. Marian Vanslembrouck

This is where the former Enjin Legal Counsel reiterated the need for marketing material to go through the legal department first before publishing. Because sometimes, firms tend to overlook ‌things that seem to be normal, but actually are red flags— like emojis. 

“There are also considerations, like avoiding using icons, like the rocket icon or the money bag icon, or even like the dollar sign or the stock chart showing the top going up,” Vanslembrouck explained. 

Are Emojis Enough To Be Flagged Down By Regulators? 

Clarifying the statements above, Vanslembrouck highlighted that the mere fact of using the said emojis will not automatically put firms in hot water, but the circumstances around the emojis do. 

“Usually, it’s because these emojis normally accompany statements, like promising returns. That’s why it’s very tricky from a legal perspective.”

Atty. Marian Vanslembrouck

Meanwhile, the lawyer also reminded that even normal users and supporters can be legally prosecuted, as long as they encourage others to buy the product. 

“If a normal user would use these emojis to promote or invite people to invest in certain projects. Although it’s less, I would say, legally risky,” Vanslembrouck expanded. “You should also note that in the Philippines, the Philippine SEC, under the Securities Regulation Code, still actually penalizes those who actually promote unregistered securities.”

The Securities Regulation Code (SRC) is the one that regulates the issuance, sale, and trading of securities in the country. It defines securities as shares, participation, or interests in a corporation or in a commercial enterprise or profit-making venture and is evidenced by a certificate, contract, or instrument, whether written or electronic in character.

Another regulation that Vanslembrouck mentioned is the Financial Products and Services Consumer Protection Act (FCPA), which was signed into law last year. It basically gave monetary regulators in the country, such as the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP), powers to enforce the provisions of the law to registered financial service providers. 

“So what it says is that, if you help solicit or offer or sell some sort of security or investment scheme from the public, even like posting online on Facebook, on social media, and you don’t have a license or permit from either the SEC or the BSP, this could actually constitute investment fraud and it’s a violation of not only the SRC, but also the FCPA,” she explained. 

In a January 2023 Public Advisory of the SEC, the Commission emphasized that all individuals involved, including influencers, endorsers, promoters, and enablers in convincing others to invest in an unregistered project can be criminally prosecuted and penalized accordingly. 

If So, What is the Best Way To Safely Promote a Crypto Project? 

For Vanslembrouck, just being honest in promoting is the best way a firm, content creators, and supporters can do:

“They must make sure that what they’re talking about or what they’re advertising is actually honest and accurate. It must not contain any holes, misleading information or even deceptive statements or try to leave out important statements that would actually influence the consumer’s decision whether to buy or use the service.” 

Atty. Marian Vanslembrouck

The lawyer also emphasized the need to prioritize the terms and conditions, specifically the contact details that customers can call, the regulations status number from either the SEC or the BSP, and the contact information of the regulatory authority. 

“Basically, just trying to be truthful, accurate, and transparent whenever you advertise to consumers, especially in their marketing materials,” Vanslembrouck concluded. 

This article is published on BitPinas: The Ethical Frontier: How to Promote Crypto Projects Without Breaking the Law

Disclaimer:

• Before investing in any cryptocurrency, it is essential that you carry out your own due diligence and seek appropriate professional advice about your specific position before making any financial decisions.
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