Recognizing the increasing popularity of virtual digital assets ("VDA"), pertinently, cryptocurrencies and NFTs, in India and the associated risks, on February 23, 2022, the Advertising Standards Council of India ("ASCI") released its guidelines on advertisements related to VDA and the manner in which these advertisements must appear in various formats, namely, print/static, video, audio, social media posts and disappearing stories/posts unaccompanied by text. The guidelines will be applicable to all advertisements published on or after April 1, 2022.
According to the guidelines, all advertisements for VDA products, VDA exchanges, or advertisements that feature VDAs must be accompanied by an "unmissable and prominent disclaimer" that "Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions." This disclaimer should be made in a "dominant language" and may not include the words, 'currency', 'securities', 'custodian' and 'depositories'. Moreover, information regarding returns for periods of less than twelve (12) months shall not be included in the advertisements. These advertisements shall also not contain statements that promise or guarantee future increases in profits and must clearly include the name and contact details of the advertiser. The guidelines also state that, given the risks involved with VDAs, celebrities and known personalities who appear in such advertisements must do their due diligence about the statements and claims made in the advertisements so as not to mislead consumers.
ASCI has clarified that the guidelines are not to be treated as a legal recognition or endorsement of the VDA sector and that ASCI is only providing self-regulation for contents of advertisements that are permitted by law.
The guidelines can be accessed at https://ascionline.in/images/pdf/vda-guidelines-23.02.22.pdf.
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