Crypto Quill

The rise of cryptocurrency advertising in India has brought a surge in influencer-led promotions, but many are flagrantly ignoring the Advertising Standards Council of India’s (ASCI) guidelines. These violations raise concerns about regulatory oversight and the impact on the Indian crypto market.

The Crypto Ad Surge and ASCI Guidelines

As cryptocurrency becomes a dominant force in global finance, the advertising budgets for crypto companies in India have exploded. In 2021 alone, it was estimated that exchanges spent over ₹200 crore on advertisements, with a substantial chunk—₹90 crore—allocated during the IPL season. This increase in ad spend has been matched by a growing reliance on influencers to push crypto products. However, influencers are falling short when it comes to adhering to the guidelines set by ASCI.

Under ASCI rules, all virtual digital asset-related advertisements must feature a prominent disclaimer, which clearly states that “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” This disclaimer, effective since April 1, 2022, applies to print, video, and audio promotional content. Despite these regulations, over 400 cryptocurrency advertisements involving influencers were flagged for non-compliance in 2022 alone.

Influencers and Crypto Brands Skipping Disclaimers

A closer look at influencer-led promotions reveals a pattern of disregard for ASCI’s mandatory disclaimer. Storyboard18 found numerous posts across YouTube and Instagram where influencers were promoting crypto platforms without the required disclaimer.

For example:

• Lakshay Chaudhary, a YouTube star with over 3 million subscribers, posted a video promoting CoinSwitch on November 20, 2024, without the disclaimer.
• On Instagram, TheFinancialYogi, with 41.8k followers, shared a video endorsing iForex Crypto, once again missing the necessary disclaimer.
• Money Tech, another popular YouTube channel with 153k subscribers, promoted Binance through a Shorts video, urging users to download the app and invest without mentioning any risks.

Why Influencers Skip the Disclaimers

Experts suggest two main reasons for this widespread omission. Rohit Aggarwal, CEO of Alpha Zegus, pointed out that both brands and agencies often discourage influencers from including the disclaimer because it can reduce engagement, as viewers tend to skip over the “commercial” parts of videos. “Crypto is a sensitive topic in the Indian ecosystem,” Aggarwal explained. “When disclaimers are added, it leads to increased government scrutiny, which influencers want to avoid.”

Another factor is the cult-like followings many influencers have cultivated. Brands targeting these influencers are banking on their loyal fanbase to drive crypto app downloads and investments. Aggarwal noted that some influencers’ followers blindly trust their endorsements, which further encourages influencers to skip the disclaimer in favor of maximizing engagement.

The Lure of Big Money

The financial incentives driving influencers are hard to ignore. Influencers with smaller followings—between 10,000 and 50,000—charge ₹20,000 to ₹50,000 per promotion. Those in the mid-tier range (50,000–500,000 followers) command ₹50,000 to ₹200,000, while top-tier influencers demand up to ₹1 million. Celebrity influencers can charge upwards of ₹1.5 million for a single promotion.

Shudeep Majumdar, CEO of Zefmo Media, an influencer marketing firm, explained that many influencers are lured by the substantial monetary rewards crypto brands offer. “The lure of money leads these influencers to ignore the ASCI’s strict regulations,” he said. “The minimal enforcement of these guidelines also contributes to the increase in violations.”

ASCI’s Role and Potential Enforcement

While crypto advertising has surged, so has scrutiny on influencers and their disregard for regulations. Experts have suggested that tougher enforcement of ASCI’s guidelines is essential to curb these violations. In 2022, the government introduced a 30% tax on crypto investments and a 1% tax deducted at source (TDS) on transactions, which led many crypto companies to dial back their high-profile marketing efforts. However, digital marketing agencies report that influencer-led campaigns are still booming.

A digital marketing agency owner, who wished to remain anonymous, confirmed that his crypto clients have increased their ad spends by 20-30%, and influencers continue to skip disclaimers to increase engagement. “We always suggest influencers take legitimate approaches to meet their reach and engagement targets,” the source said.

The question remains: will ASCI take a tougher stance on these violations? With increasing numbers of influencers bypassing rules, it might be time for ASCI to impose stricter penalties to ensure that cryptocurrency advertising complies with the law.