The Advertising Standards Council of India (ASCI) has published a new set of guidelines that seek to check advertisement and promotional activities associated with cryptocurrencies and NFTs.
According to The Economic Times, introducing the 12 guidelines on Wednesday, the self-governing body stated that all ads relating to the crypto-verse will be required to display a Voluntary Disclosure Agreement (VDA) which reads; “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
ASCI further stated the VDA applies to all forms of advertisement including audio, visual, and print format and that advertisers are required to display it in a manner that is “prominent and unmissable to an average consumer.”
Apart from prohibiting advertisers from making statements that purport to guarantee huge or fast profits, the guidelines also forbid statements that use words like securities, currency, custodian, or depositories. Advertisers are also required to provide accurate information regarding their products as well as avenues of contacting them. ASCI however noted that these rules will take effect on April 1, 2022.
The new guidelines come in the wake of the widespread circulation of crypto-related promotional materials that seek to lure investors, most of whom are not versed with the innings of high-risk investments.
“We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines.” Subhash Kamath, chairman, ASCI, said following the Wednesday announcement. “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”.
Last year, the Delhi High Court issued a notice to local authorities, media houses, and crypto exchanges in the country, requesting them to kickstart discussions on how they could tame the massive number of crypto-related advertisements. Among other pressing points, the lawyers bringing the petition had asked the court to issue an order to The Securities and Exchange Board of India(SEBI) requiring all audio-visual ads to include a disclaimer that covered 80% of the screen and a voiceover lasting for at least 5 seconds.
In the following weeks, Indian-based crypto exchanges WazirX and Bitbns paused crypto advertisements following a string of warnings and discussions around a possible regulatory clampdown.
