The ASCI said that the guidelines will be enforced from April 1, 2022, and advertisers must ensure that their previous ads don’t appear in the public domain without the new disclaimer.
Ads must have a disclaimer
The local watchdog demanded in the guidelines that crypto advertisements display a disclaimer that these “unregulated” products can be “highly risky” as there can be no regulatory recourse for loss.
“Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
The ASCI Directive has required crypto firms to prominently feature this disclaimer in the advertisements they run in the media.
The ASCI is a self-regulatory body of the Indian advertising industry. The organization has made it clear that its guidelines shouldn’t be mistaken as “legal recognition or endorsement of the industry or the sector.”
Details of ASCI Directives
ASCI noted that the publicity of these assets “has been very aggressive over the past few months”, even as the Indian government tries to come up with a legal framework for this sector. Many of these advertisements do not “adequately” disclose the risks associated with these products. There is no mechanism to ensure that they do not mislead or exploit consumers.
“ASCI has extensively consulted with different stakeholders including government and the virtual digital asset industry – to frame guidelines for virtual digital asset advertising,” it said about the process of crafting the guidelines.
Among other necessary regulations, institutions have asked crypto firms not to present comparisons of virtual digital assets with other regulated assets.
Manisha Kapoor, Secretary-General, ASCI, said: “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.”
Guidelines echo official sentiments
Earlier, in budget proposals tabled in parliament on February 1, the Indian government proposed to levy a withholding tax (TDS) of 1% on all crypto transactions and a flat rate of 30% on all such transactions. profits. It also announced the launch of its official digital currency, a CBDC, in the next fiscal year.
However, the stance of the Indian government or the central bank on digital assets has not changed. Recently, a top Reserve Bank of India official claimed that cryptocurrencies should be banned as they are like Ponzi schemes posing a threat to financial stability while having no intrinsic value.
