The Advertising Standards Council of India (“ASCI”) has published the ‘Guidelines for Advertising of virtual Digital Assets and Linked Services’ on February 23, 2022.
The ASCI guidelines extract the definition of “Virtual Digital Assets” (“VDA”) from the Financial Bill 2022, following which it lists 12 (twelve) guidelines that are required to be complied with by the VDA platforms when advertising a VDA product or the platform (dealing with VDA products). These include:
1. All advertisements (be it in print or static; video; audio; social media posts as well as disappearing stories or posts) for VDA exchanges or advertisements featuring VDA shall carry the following disclaimer:
“Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recurse for any loss from such transactions”.
1. ASCI has advised against the use of words such as “currency”; “custodian” and “depositories” in any such advertisements.
2. The information in such advertisements should not be in contravention of any information and warning provided by the regulated entities for the marketing of VDAs.
3. Advertisements presenting information as regards cost and/or profitability of VDA are required to do so in a clear, precise, accurate, updated and sufficient manner.
4. If an advertisement provides information on the past performance of a VDA, such information will not be provided on a partial or biased basis. Additionally, returns for a period of not less than 12 months shall need to be demonstrated.
5. The name and contact details [phone number or email id] of the advertiser of the VDA platform shall have to be displayed in the advertisement in a manner that is easily comprehensible.
6. A minor, or a person who appears to be a minor shall not be included in any advertisements promoting VDA platforms.
7. Advertisements are not permitted to advertise VDA products as a solution for personality problems, money issues or any other drawbacks.
8. Advertisements are not permitted to include statements that provide a guarantee or a promise for a future increase in profits.
9. Advertisements of VDA products are not permitted to create an understanding amongst consumers that suggests that consumers do not have to think twice before investing. In simpler words, a downplay of risks associated with VDA platforms is not permissible.
10. Advertisements are not permitted to draw any comparisons between VDA products and any other regulated asset.
11. Celebrities who feature in VDA advertisements must exercise caution and undertake due diligence in order to avoid misleading consumers.
The guidelines will be applicable to all VDA advertisements from April 1, 2022. Further, advertisers of VDA products and platforms are advised to either remove old advertisements or ensure compliance with these guidelines, latest by April 15, 2022.