The Advertising Standards Council of India (ASCI), the country's advertising watchdog has issued a set of guidelines for virtual digital asset (VDA) adverts like crypto and non-fungible tokens (NFTs). Set to take effect starting on or after April 1, ASCI's new guidelines mandate standardised disclosures for crypto ads and has also restricted the use of words such as "currency", which the watchdog deems to be potentially misleading for investors. Existing and older advertisements that don't comply with the guidelines before April 15 will not be allowed to be broadcast on public forums.
As per the guidelines, all virtual digital asset-related ads released on or after April 1 must carry the disclaimer 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." The disclaimer will have to be carried in promotional content on print, video, and audio media. Should there be a limit on characters, a shortened disclaimer has to be used, followed by a link to the full disclaimer.
In print or static, the disclaimer must be equal to at least 1/5th of the advertising space at the bottom of the advertisement in an easy-to-read font, against a plain background, and to the maximum font size afforded by the space, as per the guidelines.
In audio, the disclaimer must be spoken at the end of the advertisement and the voiceover should be at a normal speaking pace and must not be hurried. The guidelines also cover social media posts.
The advertising body has also barred advertisers to use the words “currency", "securities", "custodian" and "depositories" in advertisements of VDA products or services as “consumers associate these terms with regulated products".
That's not all, advertisements that provide information on the cost or profitability of VDA products must 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. Information on past performance shall not be provided in any partial or biased manner. Returns for periods of less than 12 months shall not be included," ASCI said.
Since this is a category is seen as "risky" by the ASCI, celebrities or prominent personalities who appear in crypto or NFT 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.
In a statement Subhash Kamath, chairman, 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."
Meanwhile, reactions from industry players have come in and the ASCI's guidelines are being viewed as a step in the right direction. "The clarity on advertisement guidelines will encourage crypto service providers to create annual media plan which will boost the revenues for advertising industry. The advertising guidelines are based on our current understanding of crypto ecosystem and are expected to evolve as the industry enter a more mature phase," said Shivam Thakral , CEO of Buyucoin, a homegrown cryptocurrency exchange.Meanwhile, Keyur Patel, co-founder of NFT tech platform GuardianLink and BeyondLife.club, "The buyers of NFT don't buy it because there are instant gains, they do it because they find affinity to Amitabh Bachchan or Stan Lee or they find games like racing interesting and want to participate in it. Crypto is purely a trade asset, for investments and hence, it needs very aggressive education to ensure that the expectations of returns for the buyers are not skewed by hype and unrealistic aspirations.”
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