The Advertising Standards Council of India (ASCI) has observed that numerous advertisements for virtual digital assets, commonly known as crypto or NFT products, lack sufficient disclosure of associated risks. To safeguard consumer interests and prevent misleading information, ASCI has collaborated extensively with various stakeholders, including the government and the virtual digital asset industry, to establish guidelines for advertising in this sector.
The guidelines for advertising virtual digital assets and services include the following key points:
1. All advertisements for VDA products and exchanges must include 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.”
2. Prohibited terms such as “currency,” “securities,” “custodian,” and “depositories” in VDA advertisements to avoid associating them with regulated products.
3. Advertisements should align with information and warnings provided by regulated entities in the marketing of VDA products.
4. Clear, accurate, sufficient, and updated information on the cost or profitability of VDA products in advertisements.
5. No partial or biased presentation of past performance, and returns for periods less than 12 months should not be included.
6. Advertisements must prominently display the name of the advertiser and provide easily accessible contact information.
7. Avoid featuring minors in VDA advertisements directly dealing with the product or discussing it.
8. No claims that VDA products or trading can solve financial or personality problems.
9. No promises or guarantees of future profit increases in advertisements.
10. No downplaying of risks associated with VDA products.
11. Comparison of VDA products to regulated asset classes is not allowed.
12. Celebrities or prominent personalities in VDA advertisements must conduct due diligence to avoid misleading consumers.
These guidelines are effective from April 1, 2022, and apply to advertisements released or published on or after this date. Advertisers and media owners are required to ensure compliance with the guidelines, and earlier advertisements must adhere to them post-April 15, 2022.
Subhash Kamath, Chairman of ASCI, emphasized the need for specific guidance in advertising virtual digital assets, given the emerging nature of this investment avenue. The aim is to make consumers aware of the risks associated and advise caution.
Manisha Kapoor, Secretary General of ASCI, highlighted the potential compromise of consumer interests due to inadequate disclosure in virtual digital asset advertisements. The guidelines aim to ensure fairness and transparency in advertising within this unregulated space, where significant volatility has been observed globally in virtual digital asset products.
