Come April, ads about cryptocurrency in India will carry a large disclaimer informing users of the risks associated with these assets. The Advertising Standard Council of India (ASCI), a self regulatory body that sets advertising standards in the country, issued new guidelines for crypto ads in India, which require such ads to remind users that cryptocurrency investments can be “highly risky”.
The disclaimer will say: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
Crypto ads in India have been under scrutiny since late last year, with many politicians and experts crediting accusing companies of spreading misinformation through such ads. In November this year, exchanges like WazirX, BitBNS and others decided to stop advertisements that had been running on television and online at the time. The lack of adequate information in these ads was also a point of discussion raised at a Parliamentary Committee meeting on crypto in January this year.
What are the new guidelines?
Under the new guidelines, print ads will have to give the disclaimer at least one-fifth of the total ad space, and it must be displayed in an easy to read font against a plain background. For videos, the disclaimer has to be both displayed and spoken at the end of the ad, similar to advertisements about mutual fund investments.
“In the case of long format video of over two minutes, the said disclaimer should be repeated at the beginning and at the end of the video. The disclaimer must remain on screen for a minimum of five seconds,” the ASCI’s guidelines said.
The guidelines also have provisions for shortening the disclaimers to “crypto products and NFTs are unregulated and risky” for advertisements with character limits, as on Twitter, but such ads must also include a link to the full disclaimer. Advertising on Instagram Stories and other similar modes will need the disclaimer to be “voiced” at the end of the ad, while short videos (15 second or less) will have to carry the disclaimer prominently too.
Further, the new guidelines also bar crypto exchanges and other companies from using the words currency, securities, custodian and depositories in crypto ads. Users must also be provided with information about the cost and profitability of crypto assets and hidden costs that might be associated with such transactions.
"The ASCI guidelines are a step in the right direction to standardize advertisements within the virtual digital assets space. The virtual digital assets industry is supportive of all efforts towards investor protection, however, there are nuances that need to be addressed as the space is ever-evolving. We will continue to work together with ASCI and other stakeholders to refine them further," said Ashish Singhal, founder and chief executive officer of crypto unicorn CoinSwitch Kuber.
The new guidelines will come into effect from April 1 this year, and advertisers and media owners will have to ensure that older ads comply to the standards by April 15 as well.