The crypto industry has welcomed the new set of guidelines released by the Advertising Standards Council of India (ASCI) for advertising virtual digital assets on February 23.
Late last year, the industry had faced flak from the government and was criticized for misleading advertisements across print medium, television, and social networks.
Earlier today, self-regulatory body ASCI mandated that all advertisements for virtual digital assets must carry a prominent 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.”
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On February 23, the Advertising Standards Council of India (ASCI) released a set of guidelines for advertising cryptocurrencies and non-fungible tokens (NFT).
The guidelines mandated that all advertisements for virtual digital assets should say crypto products and NFTs are unregulated and can be highly risky.
“There may be no regulatory recourse for any loss from such transactions,” said the ASCI guideline. Crypto, NFT ads should carry these guidelines prominently visible to the average consumer.
ASCI said in a statement that these guidelines have been formed after extensive consultations with stakeholders including the government and the industry. The ASCI guidelines are not entirely unexpected.
According to top bankers and central bank insiders, the unchecked spread of crypto-related advertisements.
This caused concerns to the regulator as more investors were drawn into these high-risk, unregulated instruments without understanding the associated risks.
The RBI is equally worried about the macroeconomic risks arising from the crypto transactions.
There are no accurate official estimates available on the number of crypto investors in India or the quantum of money involved. But, the number is significant.
The government’s move to tax crypto was dubbed by the crypto lobby as a step closer to legalizing the instrument. This campaign too lured fresh investors into betting on such assets.
In this context, the RBI warnings and the ASCI curbs come as a strong reminder to the crypto investors on the high-risk nature of these instruments. Logically, the RBI’s concerns seem to have influenced the ASCI decision.
ASCI also said advertisements providing information on the cost or profitability of products should be made clear, along with providing accurate and sufficient information, and an easy way for the consumer to contact the advertiser.
The 12-point guideline also said that advertisements should not promise or guarantee profits, and should not compare VDA products with a regulated asset class, or depict minors in the ads.
In this context, the ASCI guidelines will help companies and services to communicate with all consumers in a common language.
Standard disclaimers help in educating investors to make informed decisions that will grow the industry sustainably in the long term.
We welcome this development and the direction it leads us to. 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.
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