ASCI frames guidelines on NFTs; to be applicable from April 1st 2022
The Advertising Standards Council of India (ASCI) has on Wednesday come out with guidelines on advertisement of Virtual Digital Asset (VDA).
VDAs are defined as crypto products or Non Fungible Tokens (NFTs). The guidelines are to apply to all the advertisements released or published on or after the 1st of April 2022.
“Advertisers and Media owners must also ensure that all earlier advertisements must not appear in the public domain unless they comply with the guidelines, post the 15th of April 2022,” said ASCI in a statement.
Even as the Indian government continues to work on the framework for virtual digital assets (VDA), commonly referred to as crypto or NFT products, advertising for these products has been very aggressive over the past few months, points out ASCI.
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.”
According to a press release, the ASCI has noted that several of these advertisements do not adequately disclose the risks associated with such products. There is a need to protect consumer or investor interests as users may not be aware of risks arising from this form of trading and investment, the release added.
In order to safeguard consumer interest, and to ensure that ads do not mislead or exploit consumers’ lack of expertise on these products, the ASCI has consulted with different stakeholders including government and the virtual digital asset industry to frame these guidelines for virtual digital asset advertising.
The guidelines are specific on how any advertisement related to VDA must carry in 12 points. To point out a few, advertisements should carry a disclaimer, and “all disclaimers must meet the minimum requirements laid down in the ASCI guidelines for disclaimers,” notes ASCI.
It also pointed out that advertisements that provide information on the cost or profitability of VDA products should contain clear, accurate, sufficient and updated information.
It further stated that advertisements should prohibit usage of words like “currency”, “securities”, “custodian” and “depositories” and have voice overs to read out the disclaimers in video ads.
It also added that VDA products may not be compared to any other asset class which is regulated.
Even celebrities or prominent personalities promoting this category must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement, so as not to mislead consumers, stated another guideline by ASCI.
Manisha Kapoor, Secretary General, ASCI, said,
“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."
Manisha further added, "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."