Saturday, Jul 02, 2022
Outlook.com
Outlook Money

Advertisement Council Cracks Whip On Crypto Ads; Guidelines Enforced From April 2022 

The ASCI guidelines for crypto ads are supposed to become applicable from April 2022. But it is a self-regulatory body and the rules are not binding. Read on to find more about the same

undefined
Crypto Crypto

Today, the average retail investor is typically aware about most financial instruments, and the advertisements, whether on print, radio, TV, billboards, or social media, have played a huge role in bringing about this awareness.

That said, time and again, questions have been raised whether these advertisements holistically inform the investor about the genuineness of the product, or are actually marketing spiels in disguise.

It is for this very reason that the Advertising Standards Council of India (ASCI), which is a self-regulatory industry body, has often issued guidelines for various financial instruments from time to time. While these guidelines are not legally binding, both the stock market regulator, the Securities and Exchange Board of India (Sebi) and its insurance industry counterpart, the Insurance Regulatory and Development Authority of India (Irda) have been rather stringent in overseeing how asset management companies and insurance companies advertise their products.

Of late, crypto exchanges have been using celebrities from the silver screen and sports – Amitabh Bacchan, Salman Khan, Ranveer Singh, and Yuvraj Singh, among others, for advertisements.

Equally, there have been complaints from industry experts as well the highest Constitutional office of the government about the misleading nature of these ads. Prime Minister Narendra Modi had last year called out against the “misleading ads” in the context of cryptocurrencies.  

The reason for this backlash against celebrity endorsement is primarily because of two reasons – the misleading nature of the advertisements, and the cult following of the celebrity which could misguide a lot of people into falling for such products and, thus, lose out on their investments. 

For instance, one ad from a crypto exchange stated that the returns are four-times higher than what a fixed deposit gives. The ad was subsequently pulled out after some time.

“People have not quite understood the risks involved. To that extent, they are vulnerable, especially as celebrities, who enjoy a huge amount of trust and credibility from their fans, are involved,” says Subhash Kamath, chairman, ASCI.

“Any specific claim has to be communicated very clearly and without any attempt at misleading the unaware consumer. Hiding important things in the fine print doesn’t help the consumer. So, it (ads) merits better monitoring and analysis,” he adds.

In February 2022, ASCI introduced a set of 12 guidelines for the advertisement and promotion of virtual digital assets and services, including cryptos and non-fungible assets. These are to be applicable on all ads released or published on or after April 1, 2022.

According to the ASCI guidelines, crypto ads are now supposed to carry disclaimers regarding the risky nature of the asset class similar to the advertisements of mutual funds. 

To know more about the guidelines for other financial products, read the story: Behind The Scenes (outlookmoney.com) 
 

Advertisement
Advertisement
Advertisement