India wants digital currency exchanges to put standardized disclaimers on ads
2 min read
Digital currency advertisements in India will have to include a standardized disclaimer that cautions investors against the risks inherent in the industry. A high court in the Asian country has received a petition that seeks to have digital currency exchanges include the disclaimers, ensuring they take up at least 80% of the screen.
The Delhi High Court has issued notices to regulators and some of the leading exchanges as it seeks to reign in what it believes are misleading ads on television and other digital media.
According to the New Indian Express, a bench consisting of judges DN Patel and Jyoti Singh sought responses from the three leading exchanges in the country—WazirX, CoinDCX and Coinswitch Kuber. It also sent the notices to the Ministry of Information and Broadcasting, which regulates advertising in India, as well as the Securities and Exchange Board of India.
The court was acting after receiving a petition from two lawyers—Vikash Kumar and Ayush Shukla—who sought direction on the adverts that digital currency businesses can run on TV. The two, who are practicing lawyers, petitioned the court to order exchanges to have a disclaimer text that covers at least 80% of the screen.
They also want the ads to have the disclaimer read in a slow manner, lasting at least five seconds.
According to the two lawyers, exchanges have been running enticing ads on visual media, luring investors without notifying them of the risks that are associated with digital currencies.
They claimed in their petition that there is usually no voiceover for the disclaimers. In addition, the text is usually too small for the audience to read, and on most ads, it’s less than two seconds.
Digital currency ads should convey that the industry is riskier than traditional equity investment products, they stated.
“An ordinary retail investor who views the audio-visual advertisement on television run by the firms involved on a regular basis, as well as on online websites like YouTube, may suffer immense losses as a result thereof,” their plea stated.
Indian exchanges have no problem with the requirement as they also seek to protect their users, the head of communications at CoinDCX, Ramalingam Subramanian, told Business Insider.
He remarked, “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.”
In the U.K., the Advertising Standards Authority (ASA) is also taking a keener look at digital currency ads. As CoinGeek reported, the regulator views digital currency ads as “absolutely crucial and priority area for us.”
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