- Advertising Standards Council of India (ASCI), has observed that advertisement does not communicate the embedded risk and at times misleading in nature as small investors lack adequate knowledge about the risky nature of the product.
- Risk Disclaimer has to be prominent as well as unmissable and must be made in the dominant language of the advertisement.
- Digital Assets cannot be marketed as a solution to money problems and must not promise or guarantee future increase in profits.
Guidelines for Advertisement of virtual digital assets has been released by the Advertising Stands Council of India (ASCI) after deep deliberation and consultation with Government and Industry players. Though the Guidelines will be effective from 1st April 2022, Advertisers and media owners will have the obligation to ensure that previous advertisements do not appear in the public domain till the time they comply with new regulations by 15th April 2022.
Earlier addressing the World Economic Forum, virtual Davos Agenda conference Prime Minister Narendra Modi said that, to address the issues posed by cryptocurrencies, a worldwide effort is required. He emphasised that a single country’s decision will be insufficient to address its difficulties because of the technology challenges posed by cryptocurrencies.
India’s Prime Minister Narendra Modi also presided over a meeting in November 2021 to discuss the regulatory prospects of cryptocurrencies and according to the reports strong consensus was reached to curb misleading and non-transparent marketing of digital assets.
Indian Government is working on the Regulatory Framework for regulating the Digital Currencies. Draft bill is in the process and Regulations may emerge in the near future. Recently in union Budget 2022-23, Government of India levied taxation framework for taxing the gains arising from the Crypto. Issue of Advertising guidelines along with the taxation of crypto gain is a significant step in formalising the crypto market in India.
Crypto exchange has been aggressively marketing in India in order to capture the market. The Advertising Standards Council of India (ASCI), which is an industry council promoting self-regulation within Advertising Industry has noted that advertisement does not communicate the embedded risk and at times misleading in nature as small investors lack adequate knowledge about the risky nature of the product.
ASCI has framed the guidelines after extensively deliberations and consultation with Government and players of the virtual digital asset industry.
All ads for virtual digital assets (VDA) products and exchanges, must carry the disclaimer “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
Risk Disclaimer has to be prominent as well as unmissable and must be made in the dominant language of the advertisement. Digital Assets cannot be marketed as a solution to money problems and must not promise or guarantee future increase in profits. In order to differentiate between the regulated and unregulated product, ASCI has laid down that advertisement may not contain terminology like currency, securities, custodian and depositories in the advertisement as these terms are generally associated with regulated product. Further Guidelines are sensitive towards attracting millennial crowd as it restricts showing minors in the ads.
Guidelines are a welcome step as it will protect the investors by educating them about the risk and will restrict overreaching measures by the players for capturing the crypto market, which may sometime be not in the best interest of the industry. Guidelines will act as the strengthening block for the entire Crypto Industry. India is gradually taking steps for regulating Crypto industry without formally legalising it. Taxing the gains of crypto and framing guidelines on digital assets marketing are two very important steps in this direction.
Bureau Galactik Views