India dictates that cryptocurrency advertisements must make it clear that it is a risky investment
The Advertising Standards Council of India (or ASCI) has published a guidance covering cryptocurrency advertising after finding that several advertisements “did not adequately report” the risks associated with cryptocurrencies.
“In order to protect the interest of consumers and ensure that advertisements do not mislead or take advantage of consumers, [due to] a lack of [citizens’] experience, ASCI consulted with many different stakeholders, including government and the virtual asset industry to create guidelines for cryptocurrency ads,” the ASCI explained in a press release.
As part of the new guidelines, all cryptocurrency products or exchanges must share the following caveat:
“Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
The disclaimer can be issued in print, in video, audio, or in social media posts.
In addition to the disclaimer cited above, the ASCI has imposed several other standards for promoted products related to cryptocurrencies.
Ads should no longer use the words “currency”, “securities”, “custodian” or “custodian” as “consumers associate these terms with regulated products”.
Among other restrictions presented, cryptocurrency-related advertisements must not compare digital assets with any other asset class that is regulated in India, nor can they promise (or guarantee) future profits.
“Consumers need to be made aware of the risks and advised to proceed with caution,” said Subhas Kamath, president of the ASCI.
Manisha Kapoor, secretary general at ASCI, added that the “use of celebrities” can attract prospective consumers without appropriate risk disclosure.
“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,” he added.
The ASCI gave an opinion on crypto advertising as Indian regulators and lawmakers fight against the legality of cryptocurrencies and how to regulate them.
Shaktikanta Das, chairman of the Reserve Bank of India (or RBI), takes a hardline view of crypto, describing private cryptocurrencies as “a major threat to our macroeconomic and financial stability.”
Meanwhile, Indian Finance Minister Nirmala Sitharaman announced a 30% tax, with no exemptions or deductions, on cryptocurrency earnings.