ASCI releases ad guidelines for crypto and NFT products

To safeguard consumer interest, the Advertising Standards Council of India (ASCI) has released the much-anticipated guidelines for ads of crypto and NFT products after extensive consultation with stakeholders, including the government. These guidelines will come into effect from April 1. At the same time, media owners must also ensure that all previous ads must not appear in the public domain unless they comply with the guidelines, post-April 15, the self-regulatory industry body added. 

All ads for Virtual Digital Asset products (VDA) and exchanges, or featuring VDAs, will need to mandatorily carry a disclaimer in a “prominent” and “unmissable” manner stating, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”

However, in formats with a limit on characters, shortened disclaimer can be used stating “Crypto products and NFTs are unregulated and risky” followed by a link to the full disclaimer”, it added. 

In addition, the guidelines also put the onus on celebrities who endorse such products to do due diligence about the statements and claims made in the ads. Guidelines also stress that no advertisement may show that VDA products or trading can solve money problems or other drawbacks. “Also no advertisement shall contain statements that promise or guarantee future increase in profits,” it added. 

ASCI has also specified how the disclaimer needs to be carried in social media, print, audio and TV ads, and it must be in the same language as that of the ad.

In print or static, the disclaimer should be given at least 1/5th of the advertising space at the bottom in an easy-to-read font, against a plain background, and to the maximum font size afforded by the space, it said. 

Meanwhile, in TV ads, the disclaimer should be placed in text format at the end of the ad accompanied by a voice-over which should not be hurried. It also stated that depending on the ad duration, disclaimer should be displayed on screen for a minimum of five seconds to over two minutes.

“ In social media posts, such a disclaimer must be carried in both- the caption as well as any picture or video attachments. The disclaimer within the caption must be placed upfront at the beginning of the post. Where social media posts or advertisements have restrictions on text in the static picture, the disclaimer must be carried upfront in the caption before the fold,” ASCI stated. Guidelines have also been specified for disappearing stories or posts format. 

“The words “currency”, “securities”, “custodian” and “depositories” may not be used in advertisements of VDA products or services as consumers associate these terms with regulated products,” it added. 

Companies will need to also ensure that information in the ad must not contradict the warnings that the regulated entities provide to customers in marketing VDA products from time to time.

Also, ads that provide “information on the cost or profitability of VDA products shall contain clear, accurate, sufficient and updated information,” it added. Information on past performance should not be provided in any partisan por biased manner, and returns for periods of less than 12 months shall not be included, ASCI said.

Ads of VDA products will also need to carry the advertiser’s name and provide their contact details. These ads will not be allowed to show minors directly dealing or talking about the product. 

Subhash Kamath, Chairman of ASCI, said: “We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines. Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and as yet an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution”.

The ASCI, however, clarified that these guidelines do not amount to any legal recognition or endorsement of the industry or the sector, as that is a matter of government policy.

Manisha Kapoor, Secretary-General, ASCI, added,” We have seen a spate of advertising for virtual digital assets which could compromise consumer interest in the absence of some guardrails. Use of celebrities and high decibel advertising would attract consumers to these offerings, without full disclosure of the risks. Given that this is, as of now, an unregulated space, it is even more important for advertising to be upfront regarding the risks associated with these products. Globally, this is an emerging technology and products in the virtual digital asset industry have seen significant volatility. We believe with these guidelines, advertisements would be fairer and more transparent.”

Published on


February 23, 2022