The Delhi High Court today issued notice in a plea seeking guidelines to regulate advertisement of cryptocurrency asset exchanges in India (Aayush Shukla v. Wazir X).
A Bench of Chief Justice DN Patel and Justice Jyoti Singh issued notice to the Central government, Securities and Exchange Board of India (SEBI) and cryptocurrency exchanges.
The petition filed by two advocates also seeks guidelines mandating that the disclaimer text cover 80% of the screen, with a voice over read in a slow manner lasting five whole seconds.
It is further prayed that the Union Ministry of Information and Broadcasting may prevent any more audio-visual advertisements from being run on television till the abovementioned guidelines are issued.
The respondents in the present Public Interest Litigation are established cryptocurrency exchanges currently functioning within territory of India and run advertisements drawing retail investors to trade, invest in cryptocurrency and crypto assets.
The petition elaborates that crypto assets are inherently riskier and more volatile investment products than traditional shares in the equity market.
Since 2010, advertisements run through audio-visual media for mutual fund products have guidelines put in place. Therefore, the petitioners submit that similar guidelines for crypto exchanges are the need of the hour.
“Crypto-assets must be given the same treatment as mutual funds are, if not more, to protect the retail investors who are not aware of the inherent characteristics of crypto-assets and their risk profile, especially considering the fact that they are highly dependent upon supply and demand in the market and regularly rise when certain celebrities in the crypto-world make positive remarks and also regularly decline when said celebrities within the crypto-world make negative remarks,” the plea stated.
The petitioners also submit that the disclaimer text currently included in the advertisements stating, “Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks” is not in a legible font, does not include voice iteration for more than or at least 5 seconds and the line of text is smaller than the standard size, displaying for less than two seconds.
It is contended that an appropriately placed and sized disclaimer will instil the wisdom of researching risk profiles surrounding crypto-assets before ignorant investors invest their hard-earned money in digital assets without understanding them.