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Thursday February 29, 2024

SECP advises companies to avoid crypto, betting surrogate advertising

By Our Correspondent
November 22, 2023
The Securities and Exchange Commission of Pakistans logo. — SECP
The Securities and Exchange Commission of Pakistan's logo. — SECP

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Tuesday directed all companies and partnerships to refrain from advertising or sponsoring entities that promote banned products such as cryptocurrencies and online betting through surrogate means.

The SECP said it had noticed an increasing trend of surrogate advertisements on certain internet-based cryptocurrency exchanges and betting platforms, which are illegal in the country.

"The SECP has directed all companies, including limited liability partnerships (LLPs), not to enter into any type of advertisement or sponsorship agreements with entities involved in surrogate advertising," SECP said in a statement.

Surrogate advertising is the promotion of banned products as substitute goods, often through indirect means like sponsorship of sports events, aiming to implant the brand in consumers' minds.

"It has also been observed that various online platforms, disguised as sports blogs and news websites, are promoting illegal digital coins, online betting, and cryptocurrency investments," the statement said

The notification issued under Section 40B of the SECP Act also advised all companies and limited liability partnerships (LLPs) to immediately terminate all existing agreements with such surrogate entities and ensure compliance in true letter and spirit.

"The public is strongly advised to exercise extreme caution while making investments in such internet platforms and mobile apps. None of the individuals, companies, or entities advertising cryptocurrencies in Pakistan have been recognised or authorised by the SECP or other regulatory bodies," the SECP said.

"Thus, the investments promoted by these entities carry risks and may be part of fraudulent schemes."