Advertising Standards Council of India (ASCI). India’s advertising watchdog has finally established standards for advertising and promoting virtual digital assets. Such as cryptocurrencies and non-fungible tokens (NFTs), as well as related services.
Because India’s crypto and NFT markets are mostly unregulated, there are worries about deceptive marketing and the targeting of ordinary (non-professional) investors who may not be fully aware of the hazards.
The paper, which was released on Wednesday, said that all virtual digital assets (VDA) goods and services should have the following disclaimer:
ASCI’s 12-Point Guideline: “Unregulated, Highly Risky”
“Crypto goods and NFTs are unregulated and can be extremely dangerous.”
There might be no regulatory remedy for any losses incurred because of these transactions.”
This disclaimer is to be written in such a way that it is visible to the normal customer. In the paper, ASCI has detailed how the disclaimer should appear in print, video, audio, social media postings, and articles.
Consumers identify the phrases “money,” “securities,” “custodian,” and “depositories” with regulated goods, thus they may not be used in marketing.
The information in advertising must not contradict the information or cautions provided by the regulated companies.
Clear, accurate, adequate, and up-to-date information must be included in advertisements. “Zero cost,” for example, must encompass any charges that the customer may properly connect with the offer.
Past performance information should not be supplied in a partial or biassed way. Returns for periods of less than 12 months are not required to be submitted.
Every advertisement must identify the advertiser’s name and provide a simple way to contact them.
A kid, or someone who looks to be minor, may not be directly engaging with or talking about the product in any commercial.
No marketing may suggest that VDA goods or trade may help with money difficulties, personality issues, or other issues.
There should be no assertions in any advertisement that promise or guarantee future profit increases.
No commercial can claim that comprehending VDA goods is so simple that customers would invest without hesitation. Nothing in the marketing should downplay the dangers of the category.
VDA products cannot be compared to any other regulated asset class.
Because this is a high-risk category, celebrities, and other notable figures who feature in VDA marketing must use extreme caution to avoid misleading clients.
Consumer Interests Must Be Safeguarded
ASCI emphasized in the prologue to its rules that crypto and NFT-related products are a new
and emerging type of investment.
“There is a need to safeguard consumer/investor interests since users may not be aware of the
dangers associated with this type of trading and investing,” it stated. “The market for VDAs is
not regulated and may be quite volatile, as it is not backed by any actual assets.”
ASCI’s rules are not legally binding because it is a self-regulatory organization rather than a
judicial or legislative entity. If someone breaks its regulations, the identities of individuals who
did so are made public. It also refers to such complaints to the government agency, such as the
Central Consumer Protection Authority (CCPA).
Indian courts, according to a Moneycontrol article, have ruled that ASCI members are
contractually obligated to follow the standards.
Ads and scams are on the rise
According to research by crypto-analysis firm Chainalysis, India’s cryptocurrency industry
surged 641 percent from July 2020 to June 2021.
Because of this rapid growth, cryptocurrency companies like CoinDCX and CoinSwitch Kuber
have flooded the market with commercials using Bollywood stars, such as Ayushmann Khurrana
and Ranveer Singh.
According to The Economic Times, Indian crypto exchanges spent 50 crores on ads during the
ICC World Cup.
Most of these advertisements claim Crypto is simple to grasp, and that it is a secure investment
with excellent rewards.
The Enforcement Directorate of India conducted several raids in the first week of February.
As part of an investigation into a massive crypto scam involving fake crypto called Morris coin
that was floated to dupe millions of investors in Kerala, Tamil Nadu, and Karnataka out of over
Rs 1,200 crore, according to Mint.
In January, Prime Minister Narendra Modi’s official Twitter account was momentarily hacked,
with a message declaring that India had “formally recognized bitcoin as legal cash.” It was also
accompanied by a link.
The Supreme Court denied the Reserve Bank of India’s attempt to prohibit cryptocurrency in
2018.
Following that, the government began development on a cryptocurrency Bill, which aims to
outlaw all private cryptocurrencies in India and only allows for a few exceptions to “advance the
underlying technology of cryptocurrency and its purposes.”
The bill has yet to be introduced in Parliament.
Verdict
In India, keeping asides the profit side, the crypto and NFT markets are mostly unregulated,
raising worries about deceptive marketing.
