Advertisements of virtual digital assets and services will come under the purview of Advertising Standards Council of India (ASCI), the advertising industry’s self-regulatory body, from April 1, 2022. As per ASCI’s guidelines, crypto products and NFTs can no longer downplay the risks associated with investing in virtual digital assets (VDAs). The guidelines mandate that promotional communication for VDAs now need 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” prominently.
Manisha Kapoor, secretary general, ASCI, says, “While other asset classes like mutual funds are regulated by SEBI, crypto currencies and NFTs are still not regulated in India. As long as ads for VDAs are permitted, there is a need to set up guardrails.”
Other than cryptocurrency exchanges such as CoinSwitch and CoinDCX, the VDA space now includes NFT platforms. These include NFT marketplaces set up by cryptocurrency exchanges such as WazirX and others like Viacom18 (Fully Faltoo), Jupiter Meta, etc. VDAs can also be traded within the metaverse, which is another new creation in the world of technology.
Into the crypto verse
Companies that provide services in the VDA space are trying to spread awareness about their brands and the product category with their advertising. According to the 2022 Pitch-Madison Report, cryptocurrency exchanges CoinSwitch and CoinDCX spent `200-300 crore each on advertising in 2021, and were associated with sports events and reality shows. Both were prominent advertisers in cricket events in 2021.
High-decibel advertising for a category that’s not well understood by the masses and is yet to be regulated by the government raised concerns in 2021. “The VDA category is still emerging, and is not like traditional financial instruments. There is a lot of hype and uncertainty around this space. ASCI’s guidelines put the onus on both brands and ambassadors who promote these brands,” says business strategist Lloyd Mathias.
VDAs appeal to millennial consumers who are digital natives. “To these consumers, crypto products are promoted as a quick way to get rich, which they are not. Therefore, the need for caution is very high,” adds Mathias.
Shrenik Gandhi, CEO and co-founder, White Rivers Media, says there has been a dip in advertising by cryptocurrency brands since late 2021. “During this period, brands have focussed on communicating with existing customers through educational and informative content,” he says.
Crypto exchange platforms have been on a journey to educate people about the category and demystify it for those who wish to hop onto the decentralised finance (DeFi) bandwagon. To garner attention, they roped in celebrities. In an ad for CoinSwitch, for instance, Bollywood actor Ranveer Singh affirms that crypto trading is “simple”, while his counterpart Ayushmann Khurrana tells viewers that investing in crypto through the CoinDCX platform is “safe”.
The ASCI guidelines state that “no advertisement may show that understanding VDA products is so easy that consumers do not have to think twice about investing. Nothing in the ad should downplay the risks associated with the category.”
Amit Wadhwa, CEO, dentsu Creative India, says, “Brands must now focus on creating excitement around the category while clearly stating the features that differentiate one brand from another.” Given that these brands are targetting a wide audience, Wadhwa expects brand ambassadors to play a significant role in promoting VDAs.
Other product categories where advertising is regulated are alcoholic beverages and gaming. While the former simply cannot advertise in India, and therefore resorts to surrogate advertising, gaming platforms address the concern of addiction in advertisements and broadly position the apps as fun ways to spend time. ASCI introduced regulations for real money gaming advertising in November, 2020. Wadhwa points out that unlike alcoholic beverages or real money gaming which are understood by people, cryptocurrency is still a largely unfamiliar concept for most.
In late 2021, the Board of Control for Cricket in India asked IPL teams to steer clear of partnerships with crypto products for IPL 2022. Gandhi expects that with ASCI’s regulations for advertising VDAs, there could be renewed interest from these brands.
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