The Advertising Standards Council of India (ASCI) is reportedly examining ads run by crypto exchanges in India and may soon issue guidelines. In a report by Economic Times, the self-regulatory body termed cryptocurrency trading ads as an “area of concern”.
The development comes within days after a Delhi High Court division bench comprising Chief Justice D.N. Patel and Justice Jyoti Singh issued notices to respondents (SEBI, I&B Ministry, and three leading crypto exchanges in India i.e., Wazir X, CoinDCX, and Coinswitch Kuber) in a plea seeking issuance of guidelines against crypto advertisements. The writ petition (C) 6496/2021 is expected to be listed again in August.
The plea before Delhi HC states that crypto advertisements must be treated on par with mutual funds and other financial products, and must have standard disclaimers that are common with financial product ads. “An ordinary retail investor who views the audio- visual advertisement on television run by the Respondents No. 1-3 on a regular basis, as well as on online websites like Youtube, may suffer immense losses as a result thereof whilst on the other hand; having a disclaimer on screen after the end of the advertisement with voice over in English and Hindi (as may be appropriate) and correct placing and at least 80% coverage in terms of the size on screen to be viewable and readable by the investor, may instill a wisdom of researching and reading up on the risk profiles surrounding crypto-assets prior to investing his hard-earned money in digital assets not understood by him.” the plea reads.
Manisha Kapoor, general secretary of the advertising industry’s self-regulatory body, said, “ASCI is considering additional and new guidelines needed to protect consumer interests through consultation with various stakeholders,” according to the Economic Times report.
Kapoor added that ASCI’s existing guidelines require that advertisers not mislead or give false information or exploit a lack of consumer expertise on the matter, but new guidelines are being formulated.
The development at ASCI comes in at a time when multiple departments of the Central Government are examining compliance under various laws. The direct tax department has reportedly served notices to crypto exchanges seeking trader info to tax gains from the year-long bull run. The GST department is examining the taxing of the services provided by crypto exchanges.