Disclaimer: ASCI Releases Guidelines for Cryptocurrency Ads

From April 01, 2022, all Cryptocurrency ads in India should come with a 'high risk' disclaimer

Crypto advertisements or promotions in India are at their peak. Whether it be a famous Bollywood actor or your favorite YouTuber, everyone is talking about how safe it is to invest in cryptocurrencies because this is the future. To safeguard investor interest and ensure that advertisements do not mislead or exploit consumers' lack of expertise on crypto assets, the Advertising Stands Council of India (ASCI) has released new guidelines for cryptocurrency ads, which will be applicable on or after April 1, 2022. Earlier advertisements must not appear in the public domain unless they comply with the new guidelines after April 15, 2022.

Aggressive cryptocurrency ads were the theme for the last two quarters of 2021, owing to the bull market and Indian crypto exchanges seeing a great influx of new users. This led to the Delhi high court notifying the government of the need to formulate appropriate guidelines and disclaimers in July last year.

Here are some of the crucial takeaways from ASCI's new guidelines:

• The essential guideline requires all crypto advertisements to convey the accompanying disclaimer: "Crypto products and [non-fungible tokens] are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions."
• According to the ASCI guidelines, the words "currency," "securities," "custodian" and "depositories" may not be used in advertisements of VDA products or services because consumers associate these terms with regulated products.
• The guidelines also mandate the cost or profitability of VDA products shall contain clear, accurate, sufficient, and updated information. For example, "zero cost" will need to include all costs that the consumer might reasonably associate with the offer or transaction.
• The guidelines include a requirement that "returns for periods of less than 12 months shall not be included" in advertisements to make sure that "information on past performance shall not be provided in any partial or biased manner."
• India's advertising watchdog stated that several of the current crypto-related advertisements "do not adequately disclose the risks associated with such products."
• In November, Indian PM Modi chaired a meeting to consider regulatory prospects of cryptocurrencies. According to reports, during the meeting, a decision was taken to stop "attempts to mislead the youth through over-promising and non-transparent advertising."