After months of arguments between the regulators and industry stakeholders, the guidelines for crypto advertisement were formed.
On Wednesday, the Advertising Standards Council of India (ASCI) rolled out the guidelines for advertisement of crypto assets and products.
After extensive consultations with the stakeholders and the Government, these guidelines were formed.
The guidelines will be applicable on or after 1st April 2022.
In brief, they state:
- All ads for VDA (Virtual Digital Assets) products and VDA exchanges, or featuring VDAs, must carry 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 disclaimer must be, whether in print or static, “equal to at least 1/5th of the advertising space at the bottom of the advertisement in an easy-to-read font, against a plain background, and to the maximum font size afforded by the space.”
- The words “currency”, “securities”, “custodian” and “depositories” may not be used in advertisements of VDA products or services as these terms are used for regulated products.
- Information provided in the advertisement must not contradict the “warnings that the regulated entities provide to customers.”
- Information about returns on investment for a period less than 12 months should not be included.
- VDA products and services cannot show that they are a solution to financial problems, personality problems or other such drawbacks. Moreover, they cannot feature a minor or someone who appears to be a minor, directly dealing with the product.
- The advertiser’s name should be clearly stated so that it is easily understood by the average consumer.
- Celebrities or prominent personalities who appear in VDA advertisements must take special care to ensure the advertisement is not misleading as this is a risky business.
- With regards to profitability and costs, clear, accurate, sufficient and updated information should be provided.
- It cannot be shown that understanding or investing in VDA products is easy. Risks should not be downplayed with this category.
- VDA products cannot be compared to any other asset class which is regulated.
“We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines. Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and as yet an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution”.Subhash Kamath, Chairman of ASCI
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