The Indian advertising industry’s self-governing body
issued guidelines for advertising and promotion of cryptocurrencies and
non-fungible tokens (NFTs) on Wednesday to safeguard investor interest and
ensure that advertisements do not mislead.

The Advertising Standards Council of India (ASCI) noted
that the advertising for virtual digital assets (VDA) or related products has
been very aggressive over the past few months. “ASCI noted that several of
these advertisements do not adequately disclose the risks associated with such
products,” it said in a release.

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ASCI said that all VDA products and exchange related ads released on or after 1
April should 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.”

ASCI further stated that such disclaimers should be
prominent and unmissable to an average consumer. It also mentioned
specifications for the disclaimers in print, video, audio format, including
social media posts and stories. The guidelines have been announced after
discussions with stakeholders as well as the government.

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In print or static, the disclaimer must be equal to at
least 1/5th of the advertising space at the bottom of the advertisement in an
easy to read font, against a plain background, and to the maximum font size
afforded by the space. In video format, the disclaimer should be placed at the
end of the advertisement against a plain background and a voice over must
accompany the disclaimer in the text.

In audio, the disclaimer must be spoken at the end of the
advertisement. The guidelines stated that voice over should be at a normal speaking
pace and must not be hurried.

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Social media posts must carry a disclaimer in both the
caption as well as any picture or video attachments. “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,” the
ASCI added.

It also barred advertisers from using the words
“currency”, “securities”, “custodian” and “depositories” in
advertisements of VDA products or services as “consumers associate these terms
with regulated products,” added ASCI in the statement. Ads for crypto
products also cannot be compared to any other asset class which is regulated.

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As per the ASCI guidelines, no advertisement may contain
statements that promise or guarantee a future increase in profits.

The twelve-point guidelines also state that
advertisements that provide information on the cost or profitability of VDA
products must contain clear, accurate, sufficient and updated information. “For
example, “zero cost” will need to include all costs that the consumer
might reasonably associate with the offer or transaction. Information on past
performance shall not be provided in any partial or biased manner. Returns for
periods of less than 12 months shall not be included,” ASCI said.

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These guidelines bring advertisements for crypto assets
on a par with other financial instruments such as stocks and mutual funds,
which have been carrying disclaimers for quite some time.

Advertisements may not show that VDA products or VDA
trading could be a solution to money problems, personality problems or other
such drawbacks. ASCI guidelines have barred 
VDA advertisements from showing a minor dealing with crypto products.

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As per the ASCI guidelines, no advertisement may contain
statements that promise or guarantee a future increase in profits.

The advertising body suggested brand ambassadors ensure
that they have done their due diligence about the statements and claims made in
the advertisement as this is a risky category.