Crypto exchanges propose stricter guidelines for ads
After pressure from all quarters, including the government, the Indian crypto exchanges have come up with guidelines to regulate ads that often make exaggerated claims
Crypto firms should refrain from exaggerated claims in their advertisements and project it as a legal tender besides adding disclaimers about market risks, according to the recent draft guidelines prepared by Indian cryptocurrency exchanges. Recently, the crypto exchanges shared the list of do’s and don’ts about the ad campaigns with the crypto operators. The draft guidelines have irked the crypto firms, sources say.
The Advertising Standards Council of India (ASCI), the self-regulatory body of the advertising sector, had said in the past that it would come out with stricter guidelines in consultation with all stakeholders to regulate crypto ads. The guidelines are still awaited. It is still unclear when the exchanges will release the final guidelines. It is also not known whether these proposals will be binding to the crypto players.
E4M sought to get the comments and insight from Sandeep Jhingran, who is heading the crypto committee of IAMAI. His response is, however, awaited.
ASCI silent
Will the upcoming ASCI guidelines overrule the exchange guidelines or are the latter precursor to the ASCI guidelines?
When asked about it, Manisha Kapoor, DG of ASCI, said, “We will get in touch as and when there are some specific developments at our side.”
Exchanges have no locus standi: Experts
Deepak Kapoor, founder of BEGIN India think tank, said, “Crypto exchanges have no locus standi in ad regulations. They are not registered body like the ASCI. They can’t ensure that every operator abides by the guidelines.”
Kapoor added saying that exchanges have already discredited themselves, so much so that PM Narendra Modi had to speak about it. Crypto companies have been under heavy criticism over the past few months for allegedly exaggerating and misleading claims in their ads to lure young investors.
“Their flashy ads highlight the highs but sought to downplay the risks. Most of the crypto ads project themselves as a legal tender and unfair comparisons with regulated asset classes,” ad experts say.
A media planner said, “With less liquidity and more volatility, cryptocurrency prices can soar or plummet within hours. For instance, the “Squid Game” token, a popular South Korean show on Netflix, was appreciated by 75,000% last year and fell 99% in a single day causing massive losses to young investors”.
After the speculations over a proposed law banning the private crypto trade, the exchanges had suspended their ads a couple of weeks ago last November only to return in December first week when the government clarified that the Bill rather seeks to regulate the cryptos.
Caught between massive selling in the market and an uncertain regulatory environment, India’s cryptocurrency industry is trying to make the best of a worsening situation so that it is seen more favorably by government policymakers and the Reserve Bank of India.
This comes in the backdrop of the RBI move to open a dedicated department for fintech that will help create regulations for cryptocurrency and its upcoming central bank digital currency (CBDC).
