Crypto ads in India will need come with a ‘high risk’ disclaimer from April 1
Advertising Standards Council of India( ASCI) has set new guidelines for crypto adsin the country.
- Cryptocurrency exchanges had been advertising widely since the Indian Premier League cricketing event last year.
- Politicians, experts and even the country’s central bank have noted several issues with these ads.
Under the new standards, crypto exchanges and other firms running ads around ‘virtual digital assets’ will have to carry a disclaimer warning viewers that these assets can be “highly risky”.
Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
Cryptos are high risk investments
The ASCI noted that advertising of crypto products has been “very aggressive” in the past few months, and that several of these advertisements “do not adequately disclose the risks” associated with investing in cryptocurrencies.
This is an issue that politicians, experts and even officials from the country’s central bank, the
“They [cryptocurrencies] will undermine RBI’s ability to deal with issues related to financial stability. I think it is my duty to tell investors that when they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk,” RBI Governor,
Crypto ads had also been brought in question in a Parliamentary Committee hearing in January this year. Crypto exchanges, including WazirX, CoinDCX and CoinSwitch Kuber, had withdrawn their advertisements from TV last year, after experts pointed out that they are aiding the frenzy around crypto without informing users of the risks associated with such investments.
The VDA industry is supportive of all efforts towards investor protection, however, there are nuances that need to be addressed as the space is ever-evolving. We will continue to work together with ASCI and other stakeholders to refine them further.
What are ASCI’s new guidelines?
As part of the ASCI’s guidelines, print ads about crypto will need to give the disclaimer at least one fifth of the advertising space at the bottom of the ad in an easy to read font and against a plain background. On videos, the disclaimer has to be placed at the end of the ad and against plain backgrounds. The voice over must accompany the disclaimer text as well, similar to ads about mutual funds and insurance schemes.
In the case of long format video of over two minutes, the said disclaimer should be repeated at the beginning and at the end of the video. The disclaimer must remain on screen for a minimum of five seconds.
Further, the guidelines also include advertisements through Instagram stories, audio, social media posts and more. For social media posts, the disclaimer must be carried in both captions and the pictures or videos in the posts, with captions carrying the disclaimer upfront in the beginning of the post. For Stories, the disclaimer has to be “voiced” at the end of the story, and short videos of 15 seconds of less have to display the disclaimer in a prominent manner too.
Lastly, the disclaimer will be shortened to “crypto products and NFTs are unregulated and risky” along with a link to the full disclaimer if the advertising medium has a limit on characters. The disclaimer should also be placed in the “dominant language” of the advertisement in question.
The new guidelines adds in more clarity and we are committed to abide by these and represent our brand in the right light.
India’s new crypto ad regulations are about more than just putting up a disclaimer
Other than the disclaimer, the ASCI is also barring the use of the words currency, securities, custodian and depositories’ in crypto related ads.
The information in these ads must not contradict the disclaimer either, and must provide information on the cost and profitability of virtual digital asset products. This means that companies can’t simply advertise ‘zero cost’ investments without disclosing other costs that the “consumer might reasonable associate” with such transactions. Information on past performance has to be provided in an unbiased and complete manner.
Given that cryptocurrencies and NFTs have huge economic potential for our country in the near future, bodies like ASCI will also do well to introduce some educational portals or platforms that can provide right knowledge and awareness and enable the masses to make informed choices for such kind of new-age asset classes.
The new guidelines will come into effect from April 1 this year, and advertisers and media owners will have to ensure that all earlier ads also comply with the standards by April 15.
The ASCI’s guidelines come less than a month after Finance Minister Nirmala Sitharaman announced plans to tax cryptocurrency investments at India’s Union Budget this year.
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