ASCI frames guidelines for advertising and promotion of virtual digital assets, services

ASCI issues guidelines for advertising of virtual digital assets after extensive consultation with all stakeholders, including the government. These are applicable to all virtual digital asset-related ads released on or after 1st April, 2022.

Even as the Indian government continues to work on the framework for Virtual digital assets, commonly referred to as crypto or NFT products, advertising for these products has been very aggressive over the past few months. The Advertising Standards Council of India (ASCI) noted that several of these advertisements do not adequately disclose the risks associated with such products.

The guidelines make it mandatory for any such ads to carry a disclaimer of “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”

It further asserts that such a disclaimer must be made in a manner so that it is prominent and unmissable by an average consumer.

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In social media posts, specifically, such a disclaimer must be carried in both-  the caption as well as any picture or video attachments.

One of the guidelines also indicates that since this is a risky category, celebrities or prominent personalities who appear in virtual digital assets 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.

The guidelines will be applicable to all advertisements released or published on or after the 1^st of April 2022. Advertisers and media owners must also ensure that all earlier advertisements must not appear in the public domain unless they comply with the guidelines, post the 15^th of April 2022.

Subhash Kamath, Chairman, ASCI, said, “We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines. Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and as yet an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution”.

It is important to note that these guidelines do not amount to any legal recognition or endorsement of the industry or the sector, as that is a matter of government policy. ASCI only provides self-regulation for the content of ads that are permitted by law.

Manisha Kapoor, Secretary-General, ASCI, added, “We have seen a spate of advertising for virtual digital assets which could compromise consumer interest in the absence of some guardrails. The use of celebrities and high decibel advertising would attract consumers to these offerings, without full disclosure of the risks. Given that this is, as of now, an unregulated space, it is even more important for advertising to be upfront regarding the risks associated with these products. Globally, this is an emerging technology, and products in the virtual digital asset industry have seen significant volatility.  We believe with these guidelines, advertisements would be fairer and more transparent.