Even as the Indian government continues to work on the framework for virtual digital assets (VDA), commonly referred to as crypto or NFT products, advertising for these products has been very aggressive over the past few months.
Noting that several ads do not adequately disclose the risks, the Advertising Standards Council of India on Wednesday said all ads for VDAs and exchanges featuring such products must carry a disclaimer saying, “crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” It has been mentioned that the disclaimer must be prominent and unmissable by an average consumer.
The ‘Guidelines for Virtual Digital Assets and Linked Services’, ASCI said, would be applicable to all ads released or published on or after April 1, 2022. It also said ads appearing after April 15, 2022, must be in compliance with the guidelines.
The self-regulatory organisation of the advertising industry in India also warned celebrities and prominent personalities who appear in VDA advertisements. It said the personalities must take special care to ensure that they have done their due diligence.
The guidelines said no ad may show that VDA products or VDA trading could be a solution to money problems. The ASCI also said that every ad for VDA products must clearly give out name of advertiser, provide an easy way to contact them.
It said the guidelines require advertisements to be truthful, and not mislead consumers by implication, ambiguity, exaggeration or omission. Ads should also not be framed in a way that abuse consumer trust or exploit their lack of knowledge.
The guidelines also bars use of words such as “currency”, “securities”, “custodian”, and “depositories” in advertisements of VDA products. Ads that provide information on cost/profitability of VDA products should contain clear, accurate, sufficient & updated information, the ASCI said.
No ad for VDA products or exchanges may show a minor directly dealing, or talking about the product, the norms state. No ad shall contain statements that promise or guarantee future increase in profits.
The guidelines say VDA products may not be compared to any other regulated asset class and no advertisement shall contain statements that promise or guarantee a future increase in profits.
Manisha Kapoor, Secretary-General, ASCI, said: “We have seen a spate of advertising for virtual digital assets which could compromise consumer interest in the absence of some guardrails. The use of celebrities and high decibel advertising would attract consumers to these offerings, without full disclosure of the risks. 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. Globally, this is an emerging technology and products in the virtual digital asset industry have seen significant volatility. We believe with these guidelines, advertisements would be fairer and more transparent."
What else do the ASCI guidelines say?
First Published: Feb 23, 2022 12:47 PM IST
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