Advertisement regulatory body Advertisement Standards Council of India (ASCI) on Wednesday issued broad advertising guidelines for virtual digital assets (VDAs) like cryptocurrencies and NFTs. This is probably for the first time that ASCI has issued advertising guidelines for crypto & NFT guidelines.
ASCI has said that along with other things ads selling VDAs as investment product should come with a disclaimer that “Cryptos & NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
Notably, such disclaimer also usually accompany ads selling mutual fund products. But mutual funds enjoy legal sanction and are regulated by established regulatory body SEBI. Cryptos and NFTS, on other hand, still don’t enjoy legal validity and continues to get lot of bad press in the media.
ASCI’s guidelines has come at a time when several Indian crypto startups have been aggressively spending on advertisements. Many prominent newspapers are especially abound with full page ads that tries to positions crypto products as lucrative investment products. Many of these ads apparently feature popular celebrities.
While it is too early to say that whether these guidelines will adversely impact crypto startups, it might surely clip their wings to a great extent.
Mentioned below are some of the important points explicitly mentioned in ASCI’s guidelines:
- Crypto and NFT ads must desist from using popular terms like ‘currencies’ ‘securities’ and ‘depositaries. ASCI has claimed in its guidelines that consumers usually associate such terms with regulated products.
- Any information or content in the crypto ads will in no way contradict the disclaimer or warning that will invariably accompany all the crypto ads.
- No advertisement shall contain any hyperbole or exaggerated statement that claims to return guaranteed profit and double the returns in the short span of time.
- VDA ads should not use minor or anyone appearing like minor in their ads.
- Advertisements should discourage from any content that conveys to consumers that VDAs as investment products are easy to understand and they should not think twice before investment.
- Celebrities and prominent personalities appearing in the crypto ads should ensure that they fully understand the high level risk associated with VDA products. Besides, celebrities should make proper due diligence about the statements and claims that will be made in the ads.
- VDA ads should not try to compare digital products like cryptos and NFTs with regulated products like mutual funds, equity shares etc.