February 25, 2022: The Advertising Stands Council of India has released guidelines for the advertisement of crypto or any other digital assets.
In a bid to control the unregulated crypto space, the Advertising Stands Council of India (ASCI) has released guidelines for crypto or other virtual digital assets like NFTs (non-fungible tokens). The new guidelines will come into effect on April 1, and all earlier advertisements must be removed from the public domain after April 15, unless it complies with the new guidelines.
Let’s look at the most notable guidelines that will be imposed on the virtual/digital space:
- All crypto/ NFT ads must include 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.”
This one was not really a shock to many, as many advertisements do not clearly mention how risky the space is.
- No advertisements of cryptos or NFTs may show a minor who is directly dealing with the product or even talking about the product. The advertisement is not allowed to show a person who looks like a minor either.
- “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.”
Since this space is unregulated, it is really easy for people of influence to take advantage of their audience. People do not have much knowledge about how the whole thing works, and they put their money into it, thinking that it is a good business opportunity. There have been multiple instances of celebrities scamming fans. Very recently, a group of famous influencers used their platforms to promote crypto scams, which led to their fans losing millions of dollars combined.
- All advertisements have to be very clear in describing the product. They must not give the impression that investing in this space would solve money or personality problems. The ads should also not be framed in such a way, that the customer thinks that they would not need to think twice about investing in it. The advertisements must also not promise or guarantee that investing would increase profits in the future.
- Every advertisement must also clearly put out the contact information of the advertiser. It must be done in such a way that the average customer easily understands how to contact them.
The Indian government has not passed a Crypto Bill yet. However, the Union Budget has proposed a 30% tax on digital assets, a sign that India is working towards regulating the crypto/NFT space in the market.