To protect the interests of investors and ensure that advertisements do not mislead or exploit the lack of expertise of consumers on cryptocurrency assets, the Indian advertising industry’s autonomous body has come out with guidelines for virtual digital asset advertising. The guidelines have been issued after consultation with the stakeholders of the industry including the government.
The Advertising Standards Council of India (ASCI) noted that even as the government continues to work on the framework for virtual digital assets (VDAs), commonly known as crypto or non-fungible token (NFT) products, these products Advertised for. Very aggressive in the last few months. “ASCI notes that many of these advertisements do not adequately disclose the risks associated with such products,” it said in a release.
As per the guidelines, all virtual digital asset-related advertisements issued on or after April 1 must carry the disclaimer, “Crypto products and NFTs are unregulated and can be highly risky. There can be no regulatory recourse for any damages caused by such transactions.” Disclaimer will have to be carried in promotional materials in print, video and audio mediums.
In print or static, the disclaimer must be equal to at least 1/5th of the ad space at the bottom of the ad, in an easy-to-read font, against a plain background, and the maximum font that can be afforded by the space should be equal in size.
In audio, the disclaimer should be spoken at the end of the ad and the voiceover should be at normal speaking speed and not rushed. The guidelines also cover social media posts.
The advertising body prohibited advertisers from using the terms “currency”, “securities”, “custodian” and “depository” in advertisements for VDA products or services because “consumers associate these terms with regulated products”. .
Also, advertisements providing information about the cost or profitability of VDA products must contain clear, accurate, adequate and updated information. “For example, “zero cost” would be required to include all costs that the consumer could reasonably be associated with the offer or transaction. Information on past performance will not be provided in any partial or biased manner. 12 Returns for a period of less than one month will not be included,” the ASCI said.
These guidelines bring the advertisements of crypto assets on par with other financial instruments such as stocks and mutual funds, which have been carrying disclaimers for quite some time.
The rules come on the heels of the government announcing taxation rules for crypto assets in the budget.
On February 1, the government introduced a flat 1% tax on gains from crypto assets and a 1% tax deduction at source on every crypto transaction.
Shivam Thakral, CEO, BuyUcoin, a domestic cryptocurrency exchange, said, “We are delighted that finally, we have clear advertising guidelines from ASCI for crypto advertising in India. If we look at the existing crypto ads, they are already in place. – Relative Disclaimer for Investors As mentioned in the latest ASCI Guidelines, we feel that the advertising guidelines for asset-based investments should be generalized, with a clear focus on communicating the associated risks to investors. Needed.”
As per the ASCI guidelines, advertisements for VDA products or exchanges are prohibited from showing a minor with crypto products. In addition, advertisements may not imply that VDA products or VDA trading can be a solution to money problems, personality problems or other such deficiencies.
Manisha Kapoor, Secretary General, ASCI, said: “We have seen a significant proportion of advertising for virtual digital assets that, in the absence of some railings, may compromise consumer interests. The use of celebrities and high decibel advertisements, necessitates full disclosure of risks. will attract consumers to these offerings. Given that this is a hitherto uncharted space, it is even more important for advertising to be upfront about the risks associated with these products.”
In addition, no advertisement may contain statements that promise or guarantee an increase in future profits. Also, ads for crypto products cannot be compared to any other asset class that is regulated.
For brand ambassadors, the guidelines suggested that since this is a risky category, celebrities or prominent figures appearing in such advertisements should take special care to ensure that they have not complied with the statements and claims made in the advertisement. I have done my due diligence.
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