The Securities & Exchange Board of India (SEBI) has recommended that prominent such as celebrities and athletes should not endorse cryptocurrency products.
SEBI is India’s regulatory body for commodity markets and securities in India under the Indian Ministry of finance.
The market regulator has proposed that famous public personalities should be held accountable for crypto and cryptocurrency product endorsements, which can be considered a possible violation of the Consumer Protection Act or any other law.
SEBI further suggested that companies who advertise cryptocurrency and digital assets should include disclosures that highlight probably legal violations, “Dealings in crypto products may lead to prosecution for possible violation of Indian laws such as FEMA, BUDS Act, PMLA, etc.”
This recent move came after the Advertising Standards Council of India (ASCI) published guidelines for advertising cryptocurrency and crypto products in February, and the Ministry of finance asked for SEBI’s stance on Crypto ads.
In response to the Finance Ministry, the market regulator stated, “Given that crypto products are unregulated, prominent public figures including celebrities, sportsmen, etc. Or their voice shall not be used for endorsement/advertisement of crypto products.”
Last month, the market regulator had earlier explained its stand on the matter when members of India’s Parliamentary Standing Committee on Finance posed concerns about several aspects of cryptocurrency.
To back up its stand, the SEBI provided the Parliamentary Panel with a detailed written response.
In the response, SEBI noted a clause in the Advertising Standards Council of India (ASCI) guidelines for cryptocurrency, emphasizing that they have always maintained celebrities need to be diligent with crypto projects they endorse.
Also, the market regulator noted the Customer Protection Act has laid down penalties for Cryptocurrency endorsers if the ads they feature are found misleading, stating endorsers must make efforts to be very diligent as part of their responsibilities.