While the government has asked crypto influencers to follow advertisement guidelines on their social media handles, these influencers are not following them.
In the November 2021 review meeting, a high-level meeting chaired by the Indian prime minister Narendra Modi expressed concern about the over-promising and non-transparent advertisement, which is having a negative impact on the youth of India who is drawn to crypto in search of wealth.
In order to attract these young people, crypto exchanges paid celebrities huge sums for signing up as brand ambassadors. It raised the eyebrows of the government when some exchanges sponsored sports events, claiming that anyone investing in cryptocurrency would become a millionaire overnight.
After the PM’s meeting, the government department swung into action and the Advertising Standards Council of India (ASCI), a self-regulatory organization looking after advertising content, released guidelines for advertisers publishing virtual digital assets (VDA) such as cryptocurrencies and non-fungible tokens (NFTs) on social media platforms and by influencers.
According to ASCI, Indian crypto influencers are not following the rules.
YouTube and Instagram influencers are people who have millions of followers and share daily or weekly content that draws huge traffic to their channels. In addition, over 92% of violations were found in crypto influencers’ advertisements from January 2022 to May 2022.
Over 92% of crypto-related Indian ad regulations have been violated by Indian crypto influencers between January 2022 and May 2022, according to the ASCI report. Even celebrities, who have also violated ASCI norms, have not come close to these violations.
Influencers are most likely to violate the key guideline when they fail to cite a disclaimer that states that cryptocurrency investment is highly volatile, and there are high risks involved in transactions involving unregulated crypto products on the cryptocurrency market.
To avoid confusion, guidelines also require the attachment of accessible and understandable information about crypto goods and non-fungible tokens.
ASCI has taken steps to ensure compliance with government recommendations, but the adoption rate hasn’t been very promising.
As far as the non-disclosure of relevant information regarding cryptocurrency transactions is concerned, the Government of India is seriously considering and taking action. Additionally, the government is concerned about the deceptive crypto promotion by Indian influencers and their disregard for cryptocurrency legislation.
Communication with various stakeholders and experts has been conducted by the Indian government in order to resolve the issue of advertisement regulations being broken. Cryptocurrencies are widely recognized and inextricably linked with the advancement of technology and cannot be stifled.
As a matter of fact, the Supreme Court of India has overturned RBI’s earlier ban on cryptocurrency trading.
However, a number of regulatory mechanisms and strict adherence to them are urgently needed to protect cryptocurrency investors, Indian crypto influencers, and the nation’s economy from violations of both ad and crypto legislation as well as to support the volatile cryptocurrency market.