Advertising Standards Council of India (ASCI) has introduced a set of 12 guidelines for the advertisement and promotion of virtual digital assets, including cryptos and NFTs, to aid investors.
Advertisements by cryptocurrency exchanges are everywhere—you will catch them while watching your favourite match or playing a game on your mobile phone, when browsing through social media posts and more. Some of these could be misleading for retail investors, considering that there is low awareness about these instruments, and few understand the associated risks.
While the government has already come down heavily on “misleading ads”, earlier this week, the Advertising Standards Council of India (ASCI), a self-regulatory body for the advertising industry, introduced a set of 12 guidelines for the advertisement and promotion of virtual digital assets (VDAs) such as cryptocurrencies and non-fungible assets (NFTs). Read more about the guidelines here. The idea is to safeguard consumer interest, and to ensure that ads do not mislead or exploit consumers’ lack of expertise on these products, ASCI said in press statement.
Let’s look at how deep is the Indian crypto ad market is and why it’s the need of the hour to have guidelines that are followed strictly.
Cryptocurrency exchange Coinswitch Kuber, which has Bollywood actors like Ranveer Singh promoting the brand, has spent more than Rs 10 crore on Disney Hotstar, according to data shared by CREBACO, a crypto and blockchain industry research firm. In December 2021, Coinswitch Kuber recently announced that it has over 1 million users using the platform.
CoinDCX, another prominent crypto exchange in India, spent over Rs 40 crore on ads on Star Sports and had Bollywood stars, including Amitabh Bachchan and Ayushmann Khurrana, promoting the brand in 2021. According to CoinDCX, more than 1 crore people use its platform.
According to a CNBC report in November, WazirX partnered with SonyLIV to co-sponsor UEFA Euro 2020 and the India-Sri Lanka cricket tournament.
In October 2021, Bitbns, another Indian cryptocurrency exchange, launched the ‘Do Your Bit’ campaign. It hosted a series of five quirky and fun-filled videos that featured celebrities, including Alok Nath, Anup Jalota, Biswapati Sarkar, Shivaji Satnam and Sreesanth.
Most of the advertisements talk about the benefits of investing in cryptocurrencies and have no warnings for investors on the risks and volatility in these instruments. The ASCI guidelines mention the importance of having prominent disclaimers on crypto ads that are aired or printed through any platform.
Manisha Kapoor, Secretary-General, ASCI told Outlook Money that she is hopeful the industry will be responsible, and understand the spirit of the guidelines. “We are one of the first country who have released any kind of specific guidelines. It is (crypto/NFT) an evolving subject… and a dynamic space. So exhaustive consultation with different stakeholders is critical,” says Kapoor.
Crypto advertising is big at the global level and India may be no match to it. “Worldwide, leading exchanges like FTX, Crypto.com, Etoro are very aggressive in advertising. The Indian advertising budget for crypto is nothing as compared to international standards when we look at exchanges like FTX Crypto.com, Kraken, etc.,” says Sidharth Sogani, CEO, CREBACO.
Noida-based IT professional Shivam Tiwari has been investing in the crypto space since 2017, when there were hardly any crypto ads but he thinks the move will be beneficial for the investors. “Half information is always dangerous, especially in terms of investments. Earlier, crypto exchanges used to provide only one side of this asset. But after these new guidelines fill that dangerous void, I’m hoping people will understand the asset,” he says.
There are nearly 10-25 million crypto investors in the country and are estimated to contribute digital assets worth $1.1 trillion by 2032, according to a report by CrossTower, a crypto exchange.
The number of crypto investors in India is only increasing. In 2021, a report from Chainalysis, a Singapore-based blockchain data platform, said that India ranked second in a list of 20 countries with the highest cryptocurrency adoption rates. Another report by Kantar, a London-based data analytics and brand consulting company, revealed that 83 per cent of urban Indians are aware of cryptocurrency and the segment has seen 16 per cent of ownership as of 2021.
Reacting to new crypto advertisement guidelines, Rajat Srivastava, who is based in works for a pharmaceutical company in Delhi and has been investing in cryptos for the last few years feels the guidelines could have come a bit earlier.
Experts feel the move could encourage more people to invest in cryptos.
“The step can encourage crypto enthusiasts by creating awareness about digital assets while intimating them about the risks as well. It is a great boost for the crypto spectrum,” says Edul Patel, CEO and co-founder, Mudrex, a global algorithm-based crypto investment platform.
Ishan Arora, partner, Tykhe Block Ventures, a Singapore-based investment firm, feels the move will be good for the crypto industry. “This will help establish India as a serious player in the crypto space which will help companies to become unicorns in the future and create plenty of jobs in the sector,” he says.
Several Crypto exchanges have welcomed the ASCI guidelines for advertising and promotion of VDAs. “We applaud the ASCI Guidelines because we genuinely think that the goal of this sector is to foster innovation while protecting investors’ interests,” says Nischal Shetty, founder and CEO, WazirX.
“Advertising should be factual and disclose risks. We are very supportive of ASCI's intent to protect consumers,” says Kristin Boggiano, co-founder and president at CrossTower.