India: Cryptocurrency ads must carry disclaimers, say new rules

The Advertising Standards Council of India (ASCI) on Wednesday launched guidelines for the promotion and advertising of unregulated cryptocurrencies and non-fungible tokens. They will be effective from April 1.

Ads related to all virtual digital assets (VDA) must now carry a disclaimer: “Crypto products and NFTs can be highly risky. There may be no regulatory recourse for any loss from such transactions.”

The ASCI said that the disclaimers must be prominently displayed. The guidelines are for print, audio and video media, along with social media posts and stories.

The 12-point guideline says advertisers should not promise or guarantee profits and should not compare their VDA products with a regulated asset class.

“We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines,” Subhash Kamat, Chairman, ASCI, said.

“Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution.”

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A spate of advertising for virtual digital assets was seen off late, “which could compromise consumer interest in the absence of some guardrails,” said Manisha Kapoor, Secretary-General, ASCI.

“The use of celebrities and high decibel advertising would attract consumers to these offerings, without full disclosure of the risks,” she said.

“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."

Indian Prime Minister Narendra Modi had earlier said that the government would put a stop to misleading advertisements. The Reserve Bank of India had called for a ban on such activities as they threaten financial stability.

• India