crypto ads: WazirX, Bitbns hit pause on crypto ads

Synopsis

To avoid luring users who do not have an understanding of virtual currencies, WazirX has been keeping away from print and television advertisements, founder Nischal Shetty told ET.

WazirX founder Nischal Shetty Crypto exchanges WazirX and Bitbns have decided to abstain from putting out advertisements, amid discussions of a possible regulatory clampdown of the cryptocurrency sector.

To avoid luring users who do not have an understanding of virtual currencies, WazirX has been keeping away from print and television advertisements, founder Nischal Shetty told ET. The exchange, one of the largest in India for crypto trading, will also not enter into any sponsorship deals for now.

Bitbns has suspended the advertisement that claimed that its Bitcoin fixed deposit yielded a four-time higher return than bank deposits. According to people in the know, it paused the ad due to pressure from crypto industry stakeholders.
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Bitbns chief executive Gaurav Dahake confirmed the development to ET. He said the company paused the ad, but the product was still live on the platform.

Crypto exchanges had flooded TV screens with advertisements during recent sports events like the ICC T20 World Cup and Indian Premier League. People in the know said most of these entities could now tone down their claims, amid increasing scrutiny of their advertisements, some of which are alleged to be puffery and misleading. Critics say these ads could lure Indians into investing, without being aware of the risks, in an asset class notorious for wild price swings.

Crypto advertisement had also emerged as an area of concern at several high-level meetings conducted this month within the government and with industry stakeholders. On Saturday, a meeting chaired by Prime Minister Narendra Modi decided that attempts to mislead the youth through over promising and non-transparent advertising be stopped.

Meanwhile, the government is working on a Bill on cryptocurrency which could be introduced in Parliament during the first week of the Winter Session. While the Reserve Bank of India has sought a ban on virtual currencies, citing the potential risks to consumers and financial markets, the government is mulling ways to regulate the asset class and adopt a middle path since Indians have already made large investments in cryptos, ET reported earlier this month.

No consensus on guidelines
During the ICC World Cup, WazirX’s rivals had roped in top celebrities and spent Rs 50 crore, ET reported on Monday. Two of them, CoinDCX and CoinSwitch Kuber, have raised large funding rounds this year that have propelled their valuation to over $1 billion.

“We can’t impose this decision on others. I didn’t see advertisements to be right at this point. So, we didn’t go ahead,” said Shetty, when asked about the ad blitz by other exchanges.

“WazirX currently does not indulge in any TV or print advertisement. With our marketing initiatives, our goal has always been to focus on responsible marketing and spreading education among the masses about crypto,” he said.

WazirX, which is owned by Binance, last went on an advertising spree during the Indian Premier League season in March-April and in June when it announced a partnership with SonyLIV as a co-presenter for the UEFA EURO football tournament.

CoinSwitch Kuber and CoinDCX did not respond to ET’s queries on their future advertisement policy till press time Tuesday.

The exchanges and crypto selling platforms have not reached a clear consensus on guidelines for crypto advertisement. The Blockchain and Crypto Assets Council, a self-regulatory body which is part of the Internet and Mobile Association of India, has been in the process of formulating guidelines and as a result of the conversations, all the exchanges issued a disclaimer — in different forms — during the ICC T20 World Cup.

But the lack of standardised disclaimers and an absence of regulation or a framework around advertising crypto have left the interpretation of self-regulatory guidelines up to the exchanges. While some have spelled out the risks, others have stuck to a nearly invisible disclaimer that lasts for mere seconds in TV ads. Some companies have taken leeway in this absence of concrete guidelines and advertised products in regulated sectors claiming high returns.

Aggressive advertising by crypto exchanges has irked authorities previously as well. In May, ET reported that a marketing push through repeated TV ads during the IPL had caused Indian banks to enforce “informal restrictions” on cryptocurrency.

On Monday, a parliamentary standing committee discussed the opportunities and challenges posed by cryptocurrency with experts and stakeholder associations. During the discussions, one of the panel members pointed to advertisements that could entice people to invest in a volatile segment.

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Updated: 11/18/2021 — 20:00