MUMBAI: The Advertising Standards Council of India (ASCI) has released new guidelines for advertisers publishing ads about virtual digital assets (VDA), including cryptocurrencies and non-fungible tokens (NFTs).
The guidelines will be applicable to all advertisements released or published after 1 April 2022. Earlier advertisements shouldn’t appear in the public domain after 15 April 2022 unless they comply with the new guidelines.
In accordance with the new guidelines, all advertisements for VDA products, VDA exchanges or featuring VDAs should carry a disclaimer that says, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions”.
The regulatory advertising body also asserts that this disclaimer should be prominent and unmissable and makes different prescriptions for advertisements appearing in different media. It requests advertisers to present information that will be easily understood by customers.
Advertisers have also been instructed that 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 information contained in advertisements shouldn’t contradict the information or warnings that regulated entities provide to customers.
The guidelines also make recommendations against obfuscating cost and profitability, depicting minors in ads about VDA products, pitching VDA products as a solution to financial or personality problems, and downplaying the risk associated with these products, among other things.
All advertisements will also be required to clearly give out the name of the advertisers and a method of contacting them, either through phone or email. One of the guidelines published requests all celebrities to do their own due diligence when it comes to the statements they make on advertisements to avoid misleading customers.
On the matter of celebrity endorsements, the ASCI guidelines state: “Since this is a risky category, celebrities or prominent personalities who appear in VDA
advertisements must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement, so as not to mislead consumers.”
“The ASCI guidelines are a step in the right direction to standardise advertisements within the VDA space. The VDA industry is supportive of all efforts towards investor protection, however, there are nuances that need to be addressed as the space is ever-evolving. We will continue to work together with ASCI and other stakeholders to refine them further,” Ashish Singhal, founder and CEO of CoinSwitch, said reacting to the new rules.
“All investment ads and campaigns do have a responsibility to educate the users on the risks, the affiliated volatility and liquidity restrictions, and aspects of the asset. Even media, ad agencies, and other supporting ecosystems have the responsibility to educate the same market in a responsible method,” Keyur Patel, chairman of the NFT platform GuardianLink, said in a statement.
Rikki Agarwal, co-founder & COO, Blink Digital, opined: “The cryptocurrency culture seems to be growing rapidly in India with increasing adoption among young men and women. Though the Union Budget highlighted regulating the crypto and NFTs, still there is no clarity on its legality. The new guidelines by ASCI will certainly have an impact on brand engagements and ad spends going forward.
“We could also see an impact on how private crypto players plan their ad spendings during festive seasons, cricket tournaments, and on influencers and celebrities.
“In order to compete with the possible launch of the government’s digital currency, brands might consider newer avenues to interact with the consumers. Though, the move will definitely help in education and creating awareness amongst the consumers, we will have to wait and watch on how brands relook at their strategy and plan their ad spends.”
