The Indian crypto regulatory climate is quite hazy. Amidst this, the Advertising Stands Council of India [ASCI] brought some relief to crypto platforms in the market. The agency issued new standards governing cryptocurrency-related advertisements.
Advertising cryptocurrency or sites associated with it has been a contentious issue. Governments all across the world were openly prohibiting platforms from advertising cryptocurrency. However, Indian Prime Minister Narendra Modi encouraged the government to regulate it and remove attempts to deceive viewers through over-promising and opaque advertising.
The latest guidelines point out the importance of carrying a disclaimer. Ads for VDA [Virtual digital asset] products and even exchanges that endorse digital assets are required to put up a disclaimer that reads,
“Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
The disclaimer is required to be played at the end of the advertisement on a plain background with a voiceover. This disclaimer should reportedly stay for a minimum of five seconds.
The Indian government hasn’t regulated cryptocurrencies yet. Therefore, all advertisements of VDA products should refrain from using the terms, “currency”, “securities”, “custodian” as well as “depositories.” This law was put in place as the aforementioned terms are associated with regulated products which might mislead viewers.
Highlighting the risks associated with the crypto industry was also emphasized. The Indian regulator pointed out that previous crypto-related advertisements did not “adequately” reveal the risks associated with digital assets.
Furthermore, the advertising watchdog asked VDA firms to present accurate profitability statistics in their commercials. For example, “zero cost” would necessitate the presentation of all acceptable costs that a consumer might incur. It is also advised to avoid biased information about their performance.
Indian crypto firms are required to comply with these guidelines by 15 April
After April 1st, all crypto platforms in the country that choose to roll out crypto advertisements must abide by these laws. These businesses, however, have until April 15 to completely comply with these requirements and ensure that none of their former adverts remain in any public domain.
Subhash Kamath the chairman of ASCI added,
“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”.