28 July 2021
Crypto Advertisements in India should include a standardized disclaimer that cautions investors against the potential risks of the industry.
The Delhi High Court has received a signed petition that seeks to have digital currency exchanges include the disclaimers, ensuring they take up to 80% of the screen. Also, the court has issued notices to regulators and some of the leading exchanges.
According to the New Indian Express report, a bench of judges DN Patel and Jyoti Singh got responses from the three leading crypto exchanges in the country—WazirX, CoinDCX, and Coinswitch Kuber. The court has also sent notices to the Ministry of Information and Broadcasting, which regulates advertising in India, and to the Securities and Exchange Board of India (SEBI).
The Delhi High Court acted after receiving a petition from two lawyers Vikash Kumar and Ayush Shukla, who prompted the advertisement that digital currency businesses can run on TV. The two lawyers also petitioned the court to order exchanges to have a disclaimer text covering at least 80% of the screen alongwith a voiceover reading slowly for 5 seconds.
According to the two lawyers, exchanges are running attractive ads on visual media, luring investors without notifying them of the inherent risks. The duo also claimed, there is usually no voiceover for the disclaimers. In addition, the text is generally too small for the audience to read, and it’s for just 2 seconds.
Digital currency ads should notify that the industry is risky as compared to traditional equity investment products, they stated. “An ordinary retail investor who views the audio-visual advertisement on television run by the firms involved on regular basis, as well as on online websites like YouTube, may suffer immense losses as a result thereof,” their plea stated.
“While regulations, a constant demand from the industry, will cater to the advertising guidelines, adding disclaimers to all our advertisements that go on air has been a part of our self-regulatory framework. We are committed to safe and compliant measures needed for mass adoption of crypto assets and are willing to adhere to all measures that increase investor protection.”
Advertising Standards Authority (ASA) of the U.K. is also closing monitoring digital currency ads. As CoinGeek reported, the regulator views digital currency ads as “absolutely crucial and priority area for us.”
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.