ASCI sets guidelines for advertising and promoting NFT products

  • Guidelines published after extensive consultation with all stakeholders, including government.
  • It will apply to all advertisements related to virtual digital assets published on or after April 1, 2022.

Even as the Indian government continues to work on the framework for virtual digital assets, commonly referred to as crypto products or NFTs. Advertising for these products has been very aggressive over the past few months. the Indian Advertising Standards Council (ASCI) noted that many of these advertisements do not adequately disclose the risks associated with these products. In order to preserve the interest of consumers and to ensure that advertisements do not mislead or exploit consumers’ lack of expertise on these products, ASCI consulted widely with different stakeholders, including government and the virtual digital asset industry, to define guidelines for the advertising of virtual digital assets.

All advertisements for virtual digital assets and services must follow the following guidelines:

(1.1) All advertisements for VDA products and VDA exchanges, or featuring VDAs, must include the following disclaimer.

“Crypto products and NFTs are unregulated and can be very risky. There may be no regulatory recourse for any loss resulting from such transactions.

Such disclaimer must be made in the following manner so that it is PROMINENT and MUST-HAVE by an average consumer: (a) In print or static, equal to at least 1/5
and ad space at the bottom of the ad in an easy-to-read font, on a plain background, and at the maximum font size allowed for the space.

(b) In the video, the disclaimer must be placed at the end of the advertisement on a plain background. A voiceover must accompany the in-text disclaimer. The voiceover should be at a normal speaking pace and should not be rushed. In the case of a long-form video longer than two minutes, said disclaimer should be repeated at the beginning and end of the video. The warning should stay on the screen for at least five seconds.

(c) In audio, the disclaimer must be stated at the end of the advertisement. The voiceover should be at a normal speaking pace and should not be rushed. In the case of an audio format longer than 90 seconds, said disclaimer should be repeated at the beginning and end of the audio.

(d) In social media posts, such disclaimer must appear both in the caption and in any photo or video attachment. The disclaimer in the caption should be placed at the beginning of the post. Where social media posts. or advertisements have text restrictions in the static image, the disclaimer should be prominent in the caption before the fold.

(e) In stories or posts that disappear without text, said disclaimer shall be expressed at the end of the story in the manner set out in (a) or (b) above. If the video is 15 seconds or less, the disclaimer may be worn prominently and visibly as an overlay.

(f) In formats where the number of characters is limited, the following abbreviated disclaimer should be used: “Crypto products and NFTs are unregulated and pose risks”, followed by a link to the full disclaimer.

(g) The disclaimer must be written in the dominant language of the advertisement

(h) In addition to the above, all disclaimers must meet the minimum requirements set out in the ASCI Guidelines for disclaimers.

(2) The words “currency”, “securities”, “custodian” and “custodians” may not be used in advertisements for VDA products or services because consumers associate these terms with regulated products.

(3) Information in advertisements must not contradict any information or warnings that regulated entities provide to customers in connection with the marketing of VDA products from time to time.

(4) Advertisements that provide information about the cost or profitability of VDA products must contain clear, accurate, sufficient and up-to-date information. For example, “zero cost” should include all costs that the consumer could reasonably associate with the offer or transaction.

(5) Information on past performance must not be provided in a partial or biased manner. Returns for periods less than 12 months are not included.

(6) All advertisements for VDA products must clearly state the advertiser’s name and provide an easy way to contact them (phone number or email). This information should be presented in a way that is easily understood by the average consumer.

(7) No advertisement for VDA products or exchanges may show a minor, or a person who appears to be a minor, directly dealing with the product or talking about the product

(8) No advertising may show that VDA products or VDA trade could be a solution to money problems, personality problems or other similar inconveniences.

(9) No advertisement shall contain statements which promise or guarantee increased future profits.

(10) No advertisement can show that understanding VDA products is so easy that consumers do not have to think twice before investing. Nothing in the ad should minimize the risks associated with the category.

(11) VDA products cannot be compared to any other regulated asset class.

(12) Since this is a risky category, celebrities or prominent figures who appear in VDA advertisements should take special care to ensure that they have exercised due diligence on the statements and claims made. in advertising, so as not to mislead consumers.

The guidelines will apply to all advertisements served or published on or after 1
st of April 2022. Advertisers and media owners should also ensure that all prior advertisements should not appear in the public domain unless they meet the guidelines, after the 15
and from April 2022.

Subhash Kamath, Chairman of ASCI, said, “We had several rounds of discussions with government, financial sector regulators and industry stakeholders before developing these guidelines. The advertising of virtual digital assets and services requires specific guidance, given that it is a new, still emerging way of investing. Hence the need to make consumers aware of the risks and ask them to proceed with caution”.

These guidelines interpret, for virtual digital assets, Chapter 1 of the ASCI Code, in particular clauses 1.1, 1.4 and 1.5. which require that advertisements be truthful and not mislead consumers by implication, ambiguity, exaggeration or omission, and are not designed to abuse their trust or exploit their lack of knowledge.

It is important to note that these guidelines do not constitute a legal industry or sector endorsement or endorsement, as this is a matter of government policy. ASCI only provides self-regulation for the content of legally permitted advertisements.

Manisha Kapoor, Secretary General of ASCI, said: “We have seen a flurry of advertisements for virtual digital assets that could jeopardize consumer interest in the absence of certain safeguards. The use of celebrities and high-decibel advertising would attract consumers to these offers, without full disclosure of the risks. Given that this is, for now, an unregulated space, it is all the more important that advertising is upfront about the risks associated with these products. Globally, it is an emerging technology and the products of the virtual digital asset industry have seen significant volatility. We believe that with these guidelines, ads would be fairer and more transparent.


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