NFTS

ASCI issues guidelines for crypto ads, NFTs

Written by admin

The Advertising Standards Council of India (ASCI) has come out with a disclaimer for crypto ads to protect investor interests.

ASCI, a self-regulatory body for advertisements, said all ads for virtual digital assets and crypto exchanges must prominently state that “crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions” .

This comes weeks after the government introduced a 30% tax on transfer of virtual digital assets along with 1% TDS in the Union Budget 2022-23.

The advertising watchdog also says that words “currency”, “securities”, “custodian” and “depositories” may not be used in advertisements of VDA products or services as consumers associate these terms with regulated products.

“There is a need to protect consumer/investor interests as users may not be aware of risks arising from this form of trading and investment,” ASCI says. “The market for VDAs is not regulated and can be very volatile, since it is usually not backed by any tangible assets.”

The crypto asset market in India is worth $15 billion and the Indian crypto community may have over six million people or 0.5% of the country’s population, according to a report by CREBACO, a research firm focused on blockchain and cryptocurrencies.

For video ads, the disclaimer should be placed at the end of the advertisement against a plain background and a voice over must accompany the text, the guidelines read. “The voiceover should be at a normal speaking pace and must not be hurried. In the case of long format video of over two minutes, the said disclaimer should be repeated at the beginning and at the end of the video. The disclaimer must remain on screen for a minimum of five seconds.”

The self-governing body said such a disclaimer must be carried in both the caption as well as any picture or video attachments for social media posts.

For print ads, the disclaimer should be equal to at least 1/5th of the advertising space at the bottom of the advertisement in an easy-to-read font, against a plain background, the guidelines say.

These guidelines will be applicable to all advertisements released or published on or after the April 1, 2022.

“Advertisements that provide information on the cost or profitability of VDA products shall contain clear, accurate, sufficient and updated information,” ASCI says. “For example, ‘zero cost’ will need to include all costs that the consumer might reasonably associate with the offer or transaction.”

To protect gullible investors, information on past performance “shall not be provided in any partial or biased manner”, according to the guidelines. “Returns for periods of less than 12 months shall not be included,” the rules state.

Here are some other key guidelines issued by ASCI:

  • No advertisement shall contain statements that promise or guarantee future increase in profits.

  • No advertisement may show that understanding VDA products is so easy that consumers do not have to think twice about investing. Nothing in the ad should downplay the risks associated with the category.

  • Since this is a risky category, celebrities or prominent personalities who appear in VDA advertisements must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement, so as not to mislead consumers.

  • VDA products may not be compared to any other asset class which is regulated.

  • Every advertisement for VDA products must clearly give out the name of the advertiser and provide an easy way to contact them (phone number or email). This information should be presented in a manner that is easily understood by the average consumer.

About the author

admin

Leave a Comment