Virtual Digital Assets’ (VDA), as colloquially referred, constitute a new asset class which are technologically facilitated and premised on cryptography. They are effectively, digital representations of exchangeable value. As relatively new, unregulated, volatile assets, there is a need to safeguard investor interest and ensure that advertisements do not mislead or exploit consumers’ lack of expertise in such new asset class.
With this intention, the Advertising Standards Council of India (ASCI) has released ‘Guidelines for the advertising of Virtual Digital Assets and Linked Services’ on February 23, 2022 (Guidelines), after consulting industry stakeholders and the Central Government.
The Guidelines are applicable to all advertisements released or published across all mediums on or after April 1, 2022. Advertisements released or published earlier are also required to comply with the Guidelines to remain on air after April 15, 2022.
Following are the key guidelines:
ASCI and the legal force of its guidelines
ASCI is a self-regulatory body that intends to govern content displayed on various advertisements. It has provided a Code for Self-Regulation of Advertising content in India (Advertising Code), applicable to advertisements made through various mediums. The Advertising Code, however, is provided legal sanctity under Rule 7(9) of the Cable Television Network Rules, 1994 (for the purposes of cable TV advertising).
As per the Press Release dated February 23, 2022, the Chairman of ASCI has clarified that the above Guidelines do not amount to any form of legal recognition or endorsements of VDAs, and that the same is solely a matter of government policy.
One arm of the ASCI is the Consumer Complaints Council (CCC), which considers complaints (suo moto and other) received about any non-compliance of the Advertising Code or other guidelines issued by them from time to time. The CCC deliberates the complaints and provides its recommendations on whether the complaint is to be upheld or not. In case the complaint is upheld, the advertiser is given time to implement the CCC’s recommendations by withdrawing or modifying the advertisement to avoid violation of the Advertising Code. In case of continued non-compliance by the advertiser, ASCI will forward a copy of the recommendations to allied regulatory and government authorities for appropriate action. In exceptional circumstances, where there is a continued and serious breach of the ASCI Code, the ASCI may direct that the advertisement be suspended pending investigation.
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