To safeguard the interest of consumers, the Advertising Standards Council of India (ASCI) has released the much-anticipated Guidelines for Crypto and NFT Product Ads after extensive consultation with stakeholders including the government. These guidelines will come into effect from April 1. At the same time, media owners must also ensure that all previous advertisements must not appear in the public domain unless they meet the guidelines, after April 15, the self-regulatory body added. Of the industry. .
All advertisements for virtual digital asset (VDA) products and exchanges, or featuring VDAs, will be required to carry a disclaimer in a “visible” and “indisputable” manner stating that “cryptographic products and NFTs are unregulated and can be very risky. There may be no regulatory recourse for any loss resulting from such transactions.
However, in formats with a character limit, a shortened disclaimer can be used stating that “cryptographic products and NFTs are unregulated and risky” followed by a link to the full disclaimer “, he added.
In addition, the guidelines also require celebrities who endorse these products to exercise due diligence regarding statements and claims made in advertisements. The guidelines also emphasize that no advertising may show that VDA products or trade can solve money problems or other inconveniences. “Furthermore, no advertisement should contain statements that promise or guarantee increased future profits,” he added.
ASCI also clarified how the disclaimer must be disseminated in social media, print, audio and television advertisements, and it must be in the same language as the advertisement.
In print or static, the disclaimer should be at least 1/5 of the advertising space at the bottom in an easy-to-read font, on a plain background, and at the maximum font size allowed by the space , did he declare.
Meanwhile, in television commercials, the disclaimer should be placed in text format at the end of the commercial accompanied by a voiceover which should not be rushed. He also said that depending on the length of the ad, the disclaimer should be displayed on screen for at least five seconds to more than two minutes.
“In social media posts, such a disclaimer must appear both in the caption and in any image or video attachments. The disclaimer in the caption should be placed at the beginning of the post. Where social media posts or advertisements have restrictions on the text in the static image, the disclaimer should be stated in the caption before the fold,” ASCI said. Guidelines were also specified for the disappearance of stories or the format of messages.
“The words ‘currency’, ‘securities’, ‘custodian’ and ‘custodians’ may not be used in advertisements for VDA products or services because consumers associate these terms with regulated products,” he added.
Companies will also need to ensure that the information in the announcement does not contradict any warnings that regulated entities provide to customers when marketing VDA products from time to time.
Additionally, advertisements that provide “information about the cost or profitability of VDA products must contain clear, accurate, sufficient, and up-to-date information,” he added. Information about past performance should not be provided in a partisan or biased manner, and returns for periods less than 12 months should not be included, the ASCI said.
VDA product ads will also need to carry the advertiser’s name and provide contact information. These advertisements will not be permitted to show minors dealing with or talking directly about the product.
Subhash Kamath, Chairman of ASCI, said, “We had several rounds of discussions with government, financial sector regulators and industry stakeholders before developing these guidelines. The advertising of virtual digital assets and services requires specific guidance, given that it is a new, still emerging way of investing. Hence the need to make consumers aware of the risks and ask them to proceed with caution”.
ASCI, however, clarified that these guidelines do not constitute legal industry or sector endorsement or endorsement, as this is a matter of government policy.
Manisha Kapoor, ASCI General Secretary, added: “We have seen a flurry of advertisements for virtual digital assets that could jeopardize consumer interest in the absence of certain safeguards. The use of celebrities and high-decibel advertising would attract consumers to these offers, without full disclosure of the risks. Given that this is, for now, an unregulated space, it is all the more important that advertising is upfront about the risks associated with these products. Globally, it is an emerging technology and products in the virtual digital asset industry have seen significant volatility. We believe that with these guidelines, ads would be fairer and more transparent.
February 23, 2022