All advertisements for crypto products and trades should include this clear statement: “Crypto products and NFTs are not regulated and can be very dangerous. There may be no point in controlling any losses resulting from the action. ” This disclaimer statement should apply to all forms of advertising in all media, the Advertisements Standards Council of India or ASCI said on Wednesday as they released digital marketing materials (VDAs) such as cryptocurrensets and Non-Fungible Tokens (NFTs). ).
Although the guidelines are similar to those in the shared financial market and the stock market, they can reduce the start of crypto, which has been widely advertised in India, with a full page of newspaper ads and celebrity endorsements, in positioning their products as a means. easy money. The products of the mutual fund, which have self-disclosure components, can be advertised freely as they are tightly regulated and generally less flexible.
The guidelines were developed in consultation with the crypto industry and the government, ASCI said in a press release. It is not clear which companies were contacted.
ASCI issues guidelines for crypto, NFT ads in India
The Advertising Stands Council of India (ASCI) has released guidelines for crypto or virtual digital assets related advertisements, which will be applicable on or after April 1. Earlier advertisements must not appear in the public domain unless they comply with the new guidelines after April 15, 2022.
The ASCI said it held extensive consultations “with different stakeholders including government and the virtual digital asset industry” to frame the guidelines.
- The primary guideline requires all ads for VDA (virtual digital asset) products and VDA exchanges or featuring VDAs, to carry the following disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
- According to the guidelines, the words “currency”, “securities”, “custodian” and “depositories” may not be used in advertisements of VDA products or services as consumers associate these terms with regulated products.
- The guidelines also seek that cost or profitability of VDA products shall contain clear, accurate, sufficient and updated information. For example, “zero cost” will need to include all costs that the consumer might reasonably associate with the offer or transaction.
- The guidelines include a requirement that “returns for periods of less than 12 months shall not be included” in advertisements in order to make sure that “information on past performance shall not be provided in any partial or biased manner.”
- India’s advertising watchdog believed that several of the crypto-related advertisements “do not adequately disclose the risks associated with such products.”
- In November 2021, India’s Prime Minister Narendra Modi chaired a meeting to consider regulatory prospects of cryptocurrencies where reports said a strong consensus was reached to stop “attempts to mislead the youth through over-promising and non-transparent advertising.”
Subhash Kamath, Chairman of ASCI said, “We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines. Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and as yet an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution.”
The guidelines will apply to all advertisements that are published or published on April 1, 2022 or thereafter. The guidelines also stipulate that after the 15th of April, 2022 all previous advertisements must not appear on a public domain unless they comply with the guidelines.
The 12-point guide requires that the text to be read aloud in video ads and prohibits the use of terms such as ‘money’, ‘securities’, ‘caregiver’ and ‘deposits’. Ads are prohibited from displaying children dealing with digital visual assets.
Additionally, ads should not show digital assets as a solution to financial problems or other obstacles and should not promise or guarantee future profit increases.