As of October 2021, India had the highest number of cryptocurrency investors in the world, standing at 10.07 crore investors.[1] However, Virtual Digital Assets ("VDA") like cryptocurrencies and NFTs are extremely volatile.
Elon Musk, on 3rd June 2021, tweeted a meme about breaking up with Bitcoin, and the price of Bitcoin declined by 5 percent.[2] This instance aptly encapsulates the volatility of the crypto market.
In view of this volatility and the large consumer base involved, on 23rd February 2022 the Advertising Standards Council of India ("ASCI") issued a list of elaborate guidelines for creators and advertisers promoting VDAs (like cryptocurrencies and Non-Fungible Tokens ("NFTs")).
Summary of the Guidelines
Following is a summary of the guidelines that creators and advertisers must adhere to while advertising VDAs (this is not an exhaustive list; please refer to the ASCI guidelines directly).
Disclaimer Provided by ASCI
ASCI has provided the following disclaimer for creators, and asked them to mention it in a prominent manner:
"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 should accompany all types of content. For example:
- Advertisement in print/static form: 1/5th of the space of the advertisement.
- Advertisement in video form: appearing at the end of the advertisement along with the voiceover and text in a plain background. If the advertisement is over 2 minutes, at both the beginning and end of the video.
- For social media posts: on the picture or video, along with the caption of the post.
Other Requirements
- Advertisers should not use words like "currencies", "securities", "custodians" and "depositors", as consumers relate these terms with regulated products.
- For prominent personalities who appear in or endorse VDAs or trading of VDAs, ASCI has instructed them to carry out due diligence with respect to the statements they communicate to customers through their endorsements.
Conclusion
In order to protect the interest of consumers, it is pertinent to regulate advertising of cryptocurrency. One of the major concerns around cryptocurrency is its illegitimate use and volatility. In such a setting, it becomes important for authorities to formulate guidelines. Therefore, creators and advertisers must bear these guidelines in mind while putting out their advertisements.
Further, in India, the Blockchain and Crypto Assets Council has set up a code of conduct for players in the industry for the purposes of compliance. This move brings more legitimacy to the process of dealing with virtual digital assets.
[1] livemint.com, "Crypto owners in the world at 10.07 crore: report". [2] vox.com/recode, on the impact of Elon Musk's tweets on Bitcoin's price.
Disclaimer: The content of this article is intended to provide general guidance on the subject matter. Specialist advice should be sought about your specific circumstances.