The Advertising Standards Council of India (ASCI) is looking to overhaul guidelines around crypto advertising following discussions with the Union government, according to a report in the Economic Times. ASCI’s general secretary Manisha Kapoor informed the newspaper that existing codes mandate all advertising “to be honest and not exploit consumers’ lack of experience or knowledge”, which applies to crypto ads as well.
She told ET that the guidelines will cover some of these issues:
- Adequate disclosure of risk
- Ads misleading consumers over the status of crypto products as legal tender
- Exaggerated claims or unfair comparisons with regulated asset classes
What is ASCI? It is a voluntary self-regulatory organisation for advertising established in 1985. The body comprises members from marketing, creative, media, and allied companies. It drafts a code that advertising content must comply with and oversees its enforcement; however, ASCI’s guidelines are not legally enforceable.
The announcement by ASCI suggests that the ads by crypto exchanges will be undergoing a change to temper the tenor of claims being made in them.
Steps taken by the Union government to caution investors
The Union government said that it was not going to ban ads by cryptocurrency exchanges, for the time being, in response to questions by Rajya Sabha MPs Neeraj Shekhar and Sushil Kumar Modi during question hour in the winter session of the Parliament.
Finance Minister Nirmala Sitharaman, however, elaborated that the government is studying ASCI’s guidelines so as to take a decision on how to handle these ads if there is a need in the future.
She added that the finance ministry is also taking steps to caution investors through SEBI and RBI about the risks associated with cryptocurrencies.
Why is the Indian government consulting with ASCI?
The government was unhappy with crypto ads promising wild profits as revealed in a memo summarising a meeting between Prime Minister Narendra Modi and industry stakeholders. Ads promising big returns can mislead unsuspecting Indians into losing money by investing in a highly volatile crypto market. It also seemed like crypto exchanges were rushing to sign up new users in an attempt to make it harder for the government to altogether ban cryptocurrencies.
Crypto stakeholders agreed to put a stop to such ads following the meeting. Several cryptocurrency exchanges such as CoinSwitch Kuber, WazirX, and Bitbns have paused advertising across platforms. They had earmarked Rs. 100 crore for marketing in 2021 and targeted several marquee events like the Indian Premier League and T20 World Cup with a reach of millions.
Two of the exchanges— Coinswitch Kuber and CoinDCX— turned unicorn this year after their respective funding rounds left them with millions which fuelled their advertising spree.
Also read:
- BCCI asks IPL teams, media channels to stay away from crypto sponsorships: Report
- How cryptocurrencies get their value, are we in a bubble, and can crypto be regulated? Raghuram Rajan answers
- All the signs that suggest India’s crypto bill won’t ban cryptocurrencies outright
- Crypto without oversight is a threat to sovereignty: Maharashtra IGP Brijesh Singh
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