The cryptocurrency category has been under scrutiny in India over the prolific advertising by players like CoinDCX, WazirX, CoinSwitch Kuber, Zebpay etc. The brands within this category, flush with funds, have been spending substantial marketing dollars hoping to entice the mobile-first younger users.
However, the prevalent ambiguity around the regulatory framework has also led to a talk around a tighter and more stringent framework being put in place.
As per a report in ET, India’s Union Finance Minister, Nirmala Sitharaman, recently said, in reply to a question in Rajya Sabha (the Indian Council of States), that “the government is looking into the advertising watchdog’s guidelines and regulations to see what can be done to address the concerns over misleading cryptocurrency advertisements.” The government would bring a bill on cryptocurrency soon after it is approved by the union cabinet, the minister said.
In a response to a question from Sushil Kumar Modi, former Bihar deputy chief minister, Sitharaman, said, “About the misleading advertisements and about are we banning them - Advertising Standards Council of India (ASCI), which governs all advertisements, their guidelines are being studied and the regulations that they have are all being looked into so that we can take, if necessary, some kind of position to a decision to say how we are going to handle this."
The minister said there had been statements and there was an awareness building attempt to say that this is a ‘risky area’ and marketers should be wary while there's a lack of regulatory framework.
What does ASCI say?
- According to Manisha Kapoor, secretary-general of ASCI, “The ASCI guidelines for crypto advertising are under active discussion with the government and other experts and seek to resolve issues that concern consumer interest.”
- Among these are issues related to adequate disclosure of risk, consumers mistaking crypto products to be legal tender, consumers being misled by the presentation of returns in exaggerated ways and by unfair comparisons to regulated asset classes.
- Kapoor, adds, “As such ASCI’s current guidelines already require ads to be honest and not exploit consumers’ lack of experience or knowledge, and this applies to ads across all categories, including crypto products.”