The Advertising Standards Council of India (ASCI) has released new guidelines for advertising virtual digital assets and related services in a bid to introduce industry standards.
The council said in a statement that the guidelines were developed following extensive consultation with relevant stakeholders, including the Indian government. The rules are applicable to all virtual digital asset-related advertisements released on or after April 1, 2022.
The ASCI refers to the ongoing legislative work by India’s cabinet and lawmakers on new regulations for the crypto industry, and recognizes that advertising activities for these products have been “very aggressive” in the past few months.
The ASCI noted that “several of these advertisements do not adequately disclose the risks associated with such products. In order to safeguard consumer interest, and to ensure that ads do not mislead or exploit consumers’ lack of expertise on these products, ASCI has extensively consulted with different stakeholders including government and the virtual digital asset industry – to frame guidelines for virtual digital asset advertising.”
Among others, the guidelines state that all ads for digital asset products and exchanges, or featuring such assets, 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.”
The words “currency”, “securities”, “custodian” and “depositories” cannot be used in advertisements of digital asset products or services, as the watchdog considers Indian consumers associate these terms with regulated products.
Advertisements that feature information on the cost or profitability of digital asset products are required to contain clear, accurate, sufficient, and updated information. No advertisement can present statements that promise or guarantee a future increase in profits.
Ads cannot feature minors, or persons appearing to be minors, who directly deal with such products or talk about them.
They also cannot suggest that digital asset trading could serve as a solution to money or personal problems.
In addition to this, digital asset products cannot be compared to any other asset class which is regulated in the country’s market. No advertisement will be allowed to show that understanding digital asset products is so easy that Indian consumers do not have to think twice about placing an investment, and nothing in its content should downplay the risks associated with the digital asset category.
Every “advertisement must clearly give out the name of the advertiser and provide an easy way to contact them,” and have this information “presented in a manner that is easily understood by the average consumer,” according to the guidelines.