The Delhi High Court on Wednesday issued notices to the Centre and Securities and Exchange Board of India and others on a plea seeking direction for advertisements on Cryptocurrency to take effective steps and issue appropriate guidelines/rules against crypto-asset exchanges in India advertising on national television without adequate standardized disclaimers. The petition wants the Centre to prevent any future audio-visual advertisement from being aired on national television till appropriate guidelines are issued by SEBI against ads by the following crypto-asset exchanges: WazirX, CoinDCX, and Coinswitch Kuber.
Citing SEBI’s 2010 “Standard Warning in Advertising by Mutual Funds” which laid down norms for advertisements of mutual funds, the petitioner argued that crypto-assets are inherently riskier than the traditional products in the share market and mutual funds, and sought SEBI’s intervention to protect investor interest.
The plea stated that crypto-assets are inherently riskier than traditional equity investment products in the share market, mutual funds as well as all other forms of financial products offering investment opportunities. The petition has claimed that the current disclaimer used by crypto-exchanges uses the following disclaimer: “Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks”; which is displayed in a small font at the bottom of the screen and is likely to be ignored by most viewers.
The petitioner has referred to an ongoing probe on a crypto-currency exchange in Turkey for allegedly defrauding 3.9 lakh investors of nearly $2 billion, and the recent show-cause notice issued by the Indian Enforcement Directorate (ED) to a cryptocurrency exchange for allegedly violating foreign exchange laws with crypto transactions of over Rs. 2,790 crores.