Indian cryptocurrency exchanges would have to reconsider their promotional strategy soon. The Blockchain and Crypto Assets Council, a lobby group formed by crypto industry players in India, is looking to introduce a new ruleset that will determine the content of advertisements aired on television as well as online streaming platforms.
The move comes amid rising scrutiny and criticism of the country’s crypto industry by regulators demanding “standardized” disclaimers in promotions.
The new advertising guidelines will be revealed in the next seven to ten days, according to the council’s advisory board member Navin Surya. They will also be integrated into the self-regulatory framework that is currently in the works.
Lately, India’s top exchanges such as WazirX, CoinDCX, and CoinSwitch Kuber have accelerated the pace of advertising for the emergent asset class. They have also attached themselves to major sports events -- Euro 2020 and Indian Premier League (IPL) --- through sponsorship agreements. Unsurprisingly, these firms have caught the attention of many first-time investors, who were drawn to digital currencies during an ongoing pandemic.
However, more visibility has also led to regulators taking note of the sector’s growth. Just recently, the Delhi High court issued a notice to cryptocurrency exchanges after a plea argued that their disclaimers were too small to read.
Following the Delhi High court’s notice to crypto firms, the Advertising Standards Council of India (ASCI) suggested that it could roll out guidelines for crypto promotions, described as “an emerging area of concern.”
While violation of ASCI guidelines is treated as an offense against the government, they are not legally binding. This represents a vacuum for the nascent crypto industry that has taken charge of regulating itself to prevent government intervention.
Presently, there is no template approach to including disclaimers in advertisements for digital assets. Therefore, businesses have adopted an individual method of highlighting risks. For instance, WazirX commercials have a disclaimer throughout their runtime, but it only appears in a corner and that too in small font. Meanwhile, CoinDCX and CoinSwitch Kuber have positioned disclaimers at the end of their ads, in font sizes are different.
Clearly, the industry needs to address the issues surrounding promotion, not just to stave off harsh regulation but also to foster trust among investors.