Advertisers Need To Carry Disclaimers For Highly Risky Cryptocurrencies From April 1: ASCI Issues Guidelines
The Advertising Standards Council of India in the fresh guidelines said that the disclaimer must remain on screen for at least five seconds in video ads, while for long format ads of over two minutes it should be placed both at the starting and end of the ad.
Mumbai: The Advertising Standards Council of India (ASCI) on Wednesday issued fresh guidelines on cryptocurrencies and said the advertisers will have to prominently carry a disclaimer for crypto products and non-fungible tokens mentioning that these products are “unregulated and can be highly risky”.
Notably, the announcement of the guidelines, done after consultations with industry stakeholders, government and financial regulators as well, comes as the advertising for the controversial products and services is on the upswing.
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The ASCI said that such advertisements should mention that there may be no regulatory recourse for any loss from such transactions.
“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,” ASCI chairman Subhash Kamath was quoted as saying by PTI.
All Virtual Digital Assets (VDAs), which are commonly referred to as crypto or Non-Fungible Tokens (NFTs), will have to put the disclaimer in a “prominent and unmissable” way in campaigns for products and services.
During the Budget 2022 presentation, Union Finance Minister Nirmala Sitharaman had proposed a tax on gains made from such transactions which has been welcomed by the crypto players as a move to legitimise the industry, while the RBI has been firm in calling for a complete ban on such activities saying they are a threat to financial stability.
Full guidelines here:
- Moreover, the ASCI said that a fifth of the advertising space in print or static ad should be devoted to the disclaimer, while in a video, it should be placed at the end against a plain background with a voice over reading out the text at normal speed.
- The disclaimer must remain on screen for at least five seconds in video ads, while for long format ads of over two minutes it should be placed both at the starting and end of the ad.
- The ASCI said that the disclaimers also should cover audio, social media posts, disappearing stories or posts on social media.
- In formats where there is a limit on characters, the following shortened disclaimer must be used “crypto products and NFTs are unregulated and risky” followed by a link to the full disclaimer.
- Advertisers have also been barred from using the words “currency”, “securities”, “custodian” and “depositories” in advertisements of VDA products or services as consumers associate these terms with regulated products.
- Information on past performance shall not be provided in any partial or biased manner.
- Returns for periods of less than 12 months shall not be included.
- The minors should not be shown in the ads.
- No advertisement shall contain statements that promise or guarantee future increase in profits.
- Nothing in the ad should downplay the risks associated with the category, and the VDA products may not be compared to any other asset class which is regulated.
- The ASCI has also asked celebrity endorsers to do due diligence about the statements and claims made in the advertisement, so as not to mislead consumers.
- 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 15th of April.
RBI Governor Shaktikanta Das had on February 10 said that the cryptocurrencies were a “threat to macroeconomic and financial stability”.
(With inputs from PTI)
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