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India’s Supreme Court calls for regulation and limitation of liability over crypto ads

Source: https://bit.ly/2VMEo0H

The Delhi High Court has issued a notice regarding the petition filed against crypto advertising in India.

The court asked the relevant regulators to take note of the matter and issue standardized disclaimers of liability for public interest advertisements.

The Office of the Ministry of Justice has notified the Securities and Exchange Board of India (SEBI), the Ministry of Information and Broadcasting, and representatives of cryptocurrency exchanges such as: Wazir X, CoinDCX, and Coinswitch Kuber.

Indian Supreme Court and the crypto market:

The petition states that cryptocurrencies are inherently volatile, and pose an increased potential for risky outcomes when investing in them, compared to traditional investments.

In addition, the current disclaimers regarding the advertisements of these risky digital assets are too small to be read and need to be broadcast at a standard size as recognized by the Supreme Court of India.

Whereas, the Indian Supreme Court requested clarification and release of liability and put the crypto market in its true size by:

Cryptocurrencies are unregulated digital currencies, are not legal tender and are subject to market risk.

Other Aspects Provided in the Petition of the Supreme Court of India:

Besides including the disclaimer described above, it should also be provided in the form of an audio commentary for the disclaimer in case the ad is cut for too short a time and people cannot quickly read the full text.

A full disclosure regime for cryptocurrency ads, such as mutual funds, should be followed.

Whereas, as a quote from the statement of the Indian Supreme Court:

Ordinary retail investors who regularly watch audiovisual advertising on television run by the respective films, as well as on Internet sites such as YouTube, may incur huge losses as a result.

A screen disclaimer after the end of the advertisement with audio commentary in English and Hindi (as applicable) and properly positioned and at least 80% coverage by volume on the screen to be viewable and readable by the investor, may inculcate wisdom of research and reading about risk profiles surrounding crypto assets before investing their hard-earned individual investors into digital assets they don’t understand.

Campaign against crypto ads in the UK:

A similar crackdown on cryptocurrency ads has been launched in London.

The UK’s watchdog, the Advertising Standards Authority (ASA), announced a crackdown on misleading crypto ads across the country on 9 July.

Miles Lockwood, Director of Complaints and Investigations at the Advertising Standards Authority (ASA):

Advertisements for crypto are dangerous and should be alerted in red, as they pose a potential threat to the less aware and vulnerable public in financial investments.

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