Asci Frames Guidelines For Crypto, Nft Related Advertising

Noting that the advertising for these products has been aggressive over the past few months, ASCI said these guidelines are aimed to ensure that ads do not mislead or exploit consumers’ lack of expertise on these products.

The guidelines will be applicable to all advertisements released or published on or after 1 April 2022. Advertisers and media owners must also ensure that all earlier advertisements must not appear in the public domain unless they comply with the guidelines, post the 15 April 2022.

ASCI has released 12 guidelines that are meant to be followed in such a manner that it is prominent and unmissable by an average consumer with specific requirements for print, television, and digital platforms. The regulator has highlighted how voice-over, text, and disclaimers should appear in ads across media platforms.

The words “currency”, “securities”, “custodian” and “depositories” may not be used in advertisements of VDA products or services as consumers associate these terms with regulated products.

Advertisements that provide information on the cost or profitability of VDA products shall contain clear, accurate, sufficient, and updated information. For example, “zero cost” will need to include all costs that the consumer might reasonably associate with the offer or transaction.

Information on past performance shall not be provided in any partial or biased manner. Returns for periods of less than 12 months shall not be included. Every advertisement for VDA products must clearly give out the name of the advertiser and provide an easy way to contact them (phone number or email).

No advertisement for VDA products or exchanges may show a minor, or someone who appears to be minor, directly dealing with the product, or talking about the product

No advertisement may show that VDA products or VDA trading could be a solution to money problems, personality problems, or other such drawbacks.  Ads should not contain statements that promise or guarantee a future increase in profits.

Ads should not downplay the risks associated with the category. VDA products may not be compared to any other asset class which is regulated.

ASCI also clearly states that since this is a risky category, celebrities or prominent personalities who appear in VDA advertisements must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement, so as not to mislead consumers.

Subhash Kamath, Chairman, ASCI, said: “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”.

Manisha Kapoor, Secretary-General, ASCI, notes that 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,” she adds.

In November last year, Prime Minister Narendra Modi had chaired a meeting on cryptocurrency with stakeholders in which concerns around non-transparent crypto advertising were raised, stated a report by Moneycontrol.

The government strongly felt that any over-promising or misleading advertisements must be stopped. However, the same month saw an uptick in crypto ads driven by the festive season and cricket matches, according to data by AdEx India, a division of TAM Media Research.