Advertising industry body the Advertising Standards Council of India (ASCI) on Wednesday announced a set of guidelines for virtual digital assets (VDA) commonly referred to as cryptocurrency or non-fungible token (NFT) products and services. After a free run for months, players in this unregulated sector will have to follow a set of 12 guidelines which mandates them against making any unsubstantiated claims and running promotions without clear disclaimers.
In an interaction with Storyboard18, ASCI’s chairman Subhash Kamath talks about the strategy to implement new guidelines, common pain points in VDA advertising and the feedback the regulator received from the government and industry before formulating the guidelines.
What kind of discussions led to these guidelines from all stakeholders?
From an industry point of view, the feedback was there would be a need, in some way, to create some kind of disclaimer or risk warning in advertising and promotions. Organically, few players already started to do that on their own; however, it was not standardised and did not address all the risks involved.
We looked at all the crypto advertising that has happened so far and started to understand what are the areas where consumers could be misguided. For instance, some ads said that “this investment is so easy that you don’t have to think about it”.
I think the feedback from government and regulators was that they did not want consumers to be misled into investing in something where tomorrow there could be a big loss with no regulation in place. There is no legal recourse as of now, which needed to be highlighted.
As ASCI, we noticed that the returns of the crypto investments were being compared to existing regulated products such as gold. That was unfair as the risk was not highlighted.
How do you plan to implement and track the compliance of the new guidelines?
We have always achieved a high compliance of over 95% from members who do follow our guidelines. In the rare cases where the compliance is not there, then we have to take it up with the necessary government sector regulators. Our processes are fairly robust in terms of managing a complaint and educating the advertiser.
Any non-compliance issue will be escalated to Finance Ministry. In case if the compliant is about a TV ad, then Ministry of Information & Broadcasting will also be involved.
Any data that you can share on the number of consumer complaints filed under the category so far?
I think it is still early stages and we have received one complaint very recently but it will catch up with the guidelines in place. We expect a lot more complaints coming in.
At present, people do not know what to complain against in VDA advertising because they do not fully understand the ramifications. It is a new and grey category, so while platforms can promote VDA as a great form of investment, they cannot run down other forms of investment which are sector regulated.
Risks have to clearly highlighted for the consumers as well and that’s where ASCI will focus on heavily.
Unlike a well-established category like FMCG, in VDA consumers still don’t know what to complain about in an ad. They see the promise of high returns and don’t realise that actually that might not be the case. Therefore, these guidelines will help consumers to educate themselves and become vigilant enough and our suo-moto surveillance will also kickoff so we expect complaints to go up.
What's the most common pain point in VDA/NFT advertising?
The biggest concern is crypto is being advertised as this new big and exciting place for investment which is fine as long as consumers are also being made aware of the risks. It is being promoted as an extremely easy (way) to make (an) investment that one doesn’t even have to think about. It was a pattern of advertising we found problematic. The fact this is a new unregulated category and there can be no government help that can come to consumer if they were to lose money and the market being highly volatile needed to be highlighted.
Is ASCI working on edtech guidelines as well?
We have an exhaustive guideline on education which also covers multiple claims that the edtech companies are making. In fact, all the existing complaints that we receive on edtech are either looked at under the misleading ads or education guidelines. In most cases, we find that the existing guidelines are quite adequate; however, we are having conversation with the industry stakeholders and reviewing if there are any further changes that are needed in the existing guidelines.