Calls Mount for Regulation as Crypto Cos Step up TV Blitz

Concerns expressed son for on social media by financial market participants over alleged aggressive advertising practices by cryptocurrency exchanges have now spilled over to the Delhi High Court.

Earlier this month, two advocates filed a Public Interest Litigation against crypto exchanges WazirX, Coinswitch Kuber and CoinDCX, seeking the court’s intervention to direct India’s capital markets regulator to issue guidelines and take steps against advertisements on TV that run without standard disclaimers.

Crypto exchange, the Securities and Exchange Board of India (Sebi) and the Ministry of Information and Broadcasting have been named as respondents in the case.

The court has given them time till August 31, the date of the next hearing, to respond.

“Without standardized disclaimers, the normal retail investor class is put at risk of their interests not being protected by [Sebi],” according to the petition.

Despite crypto being a riskier asset class than stocks or mutual funds, it said crypto exchanges do not follow standardized guidelines for TV ads. Coinswitch Kuber and CoinDCX said in a statement that their advertisements run with disclaimers. WazirX was not immediately available for comment.

The three exchanges have a combined 15 million users, mostly young and new to crypto. In recent months, crypto exchanges have doubled down on advertising on social media, streaming platforms and TV.

Flush with funds, they have hired celebrities and influencers, have advertised during the Indian Premier League, and urged investors to buy tiny fractions of leading cryptocurrency Bitcoin for as little as Rs 100. In some cases, the petition said, exchanges have promised astronomical returns.

According to one marketing executive, top crypto exchanges spent up to Rs. 15lakh a week on digital platforms alone in May. These ads often lack spoken or written disclaimers about the asset’s volatility or if they do, they are barely noticeable. S-ET

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