In a bid to clamp down on risky crypto ads in India, the Advertising Standards Council Of India (ASCI) on Wednesday issued guidelines for all virtual digital assets (VDA)-related advertisements, which will be applicable on or after April 1.
All crypto/NFT ads must carry the following disclaimer, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
No advertisement for crypto/digital asset products or exchanges may show a minor, or someone who appears to be minor, directly dealing with the product, or talking about the product, said the advertising watchdog.
Since this is a risky category, “celebrities or prominent personalities who appear in crypto/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,” the ASCI warned.
Even as the Indian government continues to work on the framework for virtual digital assets (VDA), commonly referred to as crypto or NFT products, advertising for these products has been very aggressive over the past few months across TV, bring and digital media.
The ASCI noted that several of these advertisements do not adequately disclose the risks associated with such products.
“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,” said Subhash Kamath, Chairman of ASCI.
The ASCI extensively consulted with different stakeholders, including the government and the virtual digital asset industry to frame guidelines for virtual digital asset advertising.
“Every advertisement for VDA products must clearly give out the name of the advertiser and provide an easy way to contact them (phone number or email). This information should be presented in a manner that is easily understood by the average consumer,” according to new guidelines.
“No advertisement may show that VDA products or VDA trading could be a solution to money problems, personality problems or other such drawbacks.”
The council said that no crypto/NFT advertisement shall contain statements that promise or guarantee a future increase in profits.
“No advertisement may show that understanding VDA products is so easy that consumers do not have to think twice about investing. Nothing in the ad should downplay the risks associated with the category,” said the council.
The VDA products may not be compared to any other asset class which is regulated, it added.
Advertisers and media owners must also ensure that all earlier advertisements must not appear in the public domain unless they comply with the guidelines, post-April 15, 2022.
“We have seen a spate of advertising for virtual digital assets which could compromise consumer interest in the absence of some guardrails. Use of celebrities and high decibel advertising would attract consumers to these offerings, without full disclosure of the risks,” said Manisha Kapoor, Secretary-General, ASCI.
“Given that this is, as of now, an unregulated space, it is even more important for advertising to be upfront regarding the risks associated with these products,” Kapoor emphasised.
Although no Crypto Bill yet, the government in the Union Budget has proposed a 30 per cent tax on digital assets.
Finance Minister Nirmala Sitharaman also proposed 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold. Gifts in crypto and digital assets will also be taxed.