India May Soon Ban Celebrities from Crypto Endorsements

All crypto endorsements led by celebrities like actors or sports person may be banned due to violation of law.

India May Soon Ban Celebrity from Crypto Endorsements

Advertisement of Cryptocurrency by all influential public figures may soon be halted. As per the suggestions made by SEBI (The Securities and Exchange Board of India) all crypto endorsements led by celebrities like actors or sports person may be banned due to violation of law.

The suggestion by SEBI comes after two celebrities in USA faced multiple rows in court as they misled users about cryptocurrency through some advertisement.

Therefore the proposal by SEBI prohibits all celebrities or other popular public figures from endorsing Cryptocurrencies. It also says that
the advertisement disclosure should talk about possible violation of laws, says a report by The Hindu Business Line.

Even the use of a popular voice like that of Amitabh Bachchan is not acceptable for any crypto ad or endorsement. It further added non- compliance with the law in any case may lead to a violation of the Consumer Protection Act alongwith other laws like FEMA, BUDS Act, PMLA, etc.

Notable names in Indian film stars include Amitabh Bachchan who is reportedly brand ambassador of Crypto Exchange Coin DCX and Ranveer Singh has been roped in by another Crypto Exchange Coinswitch Kuber.

The Consumer Protection Act, 2019, also puts the onus of due-diligence on the celebrities for claims in all types of advertisements.

Any statement that comes from a celebrity holds the capacity to influence the viewers and redirect their decisions. Since the crypto market is highly speculative, any wrong decision by investors can incur huge losses.

SEBI has also proposed a penalty up to ₹10 lakh on the first-time celebrity violator on account of false claims or misleading ads. A repeated violation may escalate the fine to a further ₹50 lakh and a complete ban of up to 3 years for any other advertisement.

“The Finance Ministry has also asked the regulator to give its views on advertisement and also forwarded guidelines by Advertising Standards Council of India (ASCI)”, as reported by The Hindu.

The Indian government is trying hard to keep a check on this highly unregulated sector by calling for tight tax norms and strict rules. As of now, crypto sector is not regulated and has been named as virtual digital assets (VDA) for the purpose of taxation only.