Of the 453 complaints that ASCI took up between January to May 2022, 419 violated a mix of crypto and influencer guidelines, with the majority of the complaints being against social media influencers.
“Some influencers talk so confidently about crypto without fully understanding it. It does create an impression that it is safe, it’s fine and a cool thing,” said Manisha Kapoor, CEO, ASCI.
Amid a bull market in 2021, crypto companies flooded the social media and OTT platforms with ads and branded promotions.
Earlier this month,
Tesla CEO Elon Musk was sued for $258 billion over an alleged Dogecoin pyramid scheme. Musk was one of the key proponents of the meme coin which
brought hordes of Indians to the crypto exchanges last year.
Top crypto exchanges such as Coin DCX and CoinSwitch Kuber brought on board Bollywood stars such as Ayushmann Khurrana and Ranveer Singh, respectively, for ad campaigns during the ICC T20 World Cup and cash-rich Indian Premier League.
As much as Rs 50 crore was spent during the sports event by crypto platforms, ET reported on November 16 last year.
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At that time, financial and legal experts raised concerns over some ads promoting cryptos, which they
said were towing a fine line between “puffery” and “misrepresentation”.
Critics said some of these ads could lure Indians into investing in an asset class notorious for wild price swings, and without any knowledge about the risks.
Amid broader macroeconomic factors, crypto markets have also taken a beating, with Bitcoin – the cryptocurrency with the largest market value – plummeting from its 2021 highs to below $20,000-levels at one point.
Going ahead, Kapoor said ASCI will continue to focus on adequate disclosures for payment-based promotions and risks to be called out in the disclaimers. Additionally, the body is focussing on driving awareness with crypto exchanges.
“Some of these influencer ads don’t even talk about the risks, which is not right and against our guidelines. Technically, they are ads with no disclosures or disclaimers, which is mandatory. This is in violation of our guidelines. We will escalate it to the government in case of no compliance,” she said.
In February this year, ASCI issued the guidelines for the promotion and advertisement of cryptocurrencies, crypto exchanges and Non-fungible tokens (NFTs). The guidelines, which kicked in on April 1, mandated all virtual digital asset (VDA) products and services to carry the disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
Additionally, ASCI also has guidelines for influencer marketing.
ASCI is a self-regulatory body, and its guidelines are not legally binding. In case of a breach, the standards body publishes the names of those who have not adhered to the guidelines, and escalates the cases to the relevant government regulator.