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The Advertising Standards Council of India (ASCI) has published guidelines covering the advertisement of crypto assets, after finding that several ads “do not adequately disclose” risks associated with crypto.
“In order to safeguard consumer interest, and to ensure that ads do not mislead or exploit consumers; lack of expertise on these products, ASCI has extensively consulted with different stakeholders including government and the virtual asset industry—to frame guidelines for virtual digital asset advertising,” the ASCI said in a press release.
As part of the new guidelines, all virtual digital assets products or exchanges must share the below disclaimer:
“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.
What else do the ASCI guidelines say?
In addition to the above disclaimer, the ASCI has imposed several other standards on those advertising crypto-related products.
Advertisements must no longer use the words “currency,” “securities,” “custodian,” or “depositories,” as “consumers associate these terms with regulated products.”
Among the other restrictions in place, crypto-related ads may not compare digital assets with any other asset class that is regulated in India, nor may they promise—or guarantee—future profits.
“There is a need to make consumers aware of the risks and ask them to proceed with caution,” said Subhas Kamath, ASCI chairman.
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.
India and crypto
The ASCI has weighed in on crypto advertising as India’s regulators and lawmakers wrestle with the legality of cryptocurrency and how to regulate it.
The governor of the Reserve Bank of India, Shaktikanta Das, has taken a hardline stance on crypto, describing private cryptocurrency as “a big threat to our macroeconomic stability and financial stability.”
Meanwhile, India’s finance minister Nirmala Sitharaman has announced a 30% tax on crypto income with no exemptions or deductions.
Crypto advertising around the world
India has followed a number of countries in issuing guidelines around crypto advertising.
Earlier this year, Spain’s National Securities Market Commission (CNMV) launched a crackdown on crypto advertising, requiring influencers to disclose whether they’ve received remuneration for promoting cryptocurrencies, with fines for non-compliance up to €300,000 ($342,000).
In the UK, the government has announced plans to introduce legislation to protect consumers from misleading crypto ads, citing research that “suggests that understanding of what crypto actually is is declining.”