Digital asset ads in India must come with a disclaimer that warns potential investors about the level of risk they are exposed to starting April 1. This is one of the stipulations of new guidelines by the country’s advertising watchdog for the industry published Wednesday.
The Advertising Stands Council of India (ASCI) announced the new rules in a press release last February 23, declaring that they are highly needed even as the country works towards overall regulations for digital assets and NFTs.
“Advertising for these products has been very aggressive over the past few months,” the ASCI pointed out, claiming that it has noted that most of these ads don’t disclose the risks associated with the sector.
Following consultations with industry stakeholders and the government stakeholders, the watchdog arrived at 12 guidelines that all virtual digital asset (VDA) firms must adhere to when promoting their products.
First, all ads must carry a disclaimer stating, “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 take at least a fifth of the ad space in print form. In video, the disclaimer must come at the end, accompanied by a voiceover.
In line with the country’s outlook on Bitcoin being an asset and not a currency as Satoshi Nakamoto originally intended, the watchdog has prohibited using words such as “currency” and “custodian.” Such terms are associated with regulated products, the ASCI says.
VDA firms shall not contradict what regulators say in their ads and must outline all the involved costs clearly and accurately. When touting their income-generating record, VDA firms shall not include any data beyond the previous 12 months.
Digital asset ads must clearly outline the name and contact of the adviser and must not pose as a solution to money problems, the ASCI further stated. In addition, no ad will involve a minor directly dealing with the product.
The ASCI also took aim at firms that tout just how easy it is to invest in digital assets. It says that “no advertisement may show that understanding VDA products is so easy that consumers do not have to think twice about investing.”
Crypto.com is one of the companies that has been at odds with regulators for its ads for this reason, with the U.K. advertising watchdog ordering it to take down one ad that focused on just how easy it is to buy digital assets through a credit card.
The new guidelines come when regulators globally are going after digital asset ads. In Singapore, the central bank recently ruled out all Bitcoin ads in public places, including public transport, social media platforms, third-party websites, roadshows, and more. The Monetary Authority of Singapore (MAS) also prohibited social media influencers from pushing related products.
Spain also published a strict code of ethics for these influencers promoting Bitcoin products, with fines of up to $340,000 for those that breach these rules. The country’s financial regulator now insists on responsible ads, which are “clear, balanced, fair and non-misleading content and information on the risks in a prominent manner.”
India’s advertising guidelines come at a time when the government has been switching back and forth between regulating the industry and banning it altogether. The Reserve Bank of India has been adamant that a ban is the best move, but industry stakeholders have been pushing for enabling regulations.
Watch: CoinGeek New York panel, Media Influence: How News Reporting Affects the Digital Asset Market
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