Celebrities must do their homework before endorsing crypto, says ad body

Manisha Kapoor, the chief executive officer (CEO) of ASCI, said, “We have always maintained that celebrities need to do their due diligence on the claims they endorse. The Consumer Protection Act also lays down penalties for endorsers in case the ad they feature in is found to be misleading, and if they have done no due diligence.”

“Since this is a risky category, celebrities and prominent personalities who appear in such advertisements must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement so as not to mislead consumers. Endorsers may not have domain expertise but they must make the effort to do due diligence,” Kapoor added.

ASCI’s statement comes after a report by Hindu Businessline said the Securities and Exchange Board of India (Sebi) has recommended to the Parliamentary Standing Committee on Finance that celebrities should not be allowed to endorse crypto and other virtual digital assets (VDA).

ET’s queries to Sebi and the Parliamentary Standing Committee did not elicit a response.

In February,
ASCI issued guidelines for the promotion and advertisement of cryptocurrencies and NFTs. The guidelines, which came into effect on April 1, require all ads for VDA products and services to carry this disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”

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ASCI is a self-regulatory body and its guidelines are not legally binding. In case of a breach, it has in the past published the names of those who have not adhered to its guidelines. It also escalates such cases to the relevant government regulator.

Cryptocurrency platforms CoinDCX and CoinSwitch Kuber last year roped in Bollywood stars such as Ayushmann Khurrana and Ranveer Singh for ad campaigns during the ICC World Cup. Crypto exchanges flooded TV screens with advertisements during the ICC T20 World Cup and Indian

League as well. They spent a combined Rs 50 crore during the T20 World Cup, ET reported on November 16.

But several crypto platforms paused large-scale television and print advertisements later that month after facing criticism from the government and industry stakeholders, who said they were misleading.