As crypto exchanges in India gain popularity, a case has been filed in the country’s high court by the Securities and Exchange Board of India (Sebi), seeking to ban advertisements for crypto-related companies, whether they are on television, traditional media or digital platforms. Sebi’s move has left many in the industry questioning why such a ban was necessary, given the fact that the industry is still in its infancy in India.
In an effort to regulate the booming cryptocurrency market in India, the country’s Supreme Court has requested that local cryptocurrency exchanges declare what kind of advertisements they plan to run on their platforms. The state in India is trying to regulate the cryptocurrency market because it is on a rapid upswing. India’s Supreme Court has been at the center of this debate for some time now, since in April 2018, the court repeatedly asked exchanges in the country to disclose information about the advertisements they intend to run on their platforms.
Amid continuing uncertainty over the regulation of cryptocurrencies in India, a Supreme Court in the country’s capital is taking steps to regulate the advertising of local cryptocurrencies.
The Delhi High Court has issued notices to local authorities and cryptocurrency companies to enforce rules on cryptocurrency exchanges advertising on national television, The New Indian Express reported on Wednesday.
The court wants answers from the Securities and Exchange Board of India (SEBI), the Ministry of Information and Broadcasting and India’s leading cryptocurrency exchanges, including CoinDCX and WasirX, and plans to hear the case in August.
According to the report, lawyers Ayush Shukla and Vikash Kumar have asked the court to direct SEBI to issue advertising guidelines that require audiovisual ads for cryptocurrencies to include disclaimers that take up 80 percent of the screen and be accompanied by at least five seconds of voiceover.
Petitioners pointed out that many advertisements for cryptocurrencies on national television do not include a voice-over, and that the warning text is displayed in short, small print and usually includes a line such as Cryptocurrency is an unregulated digital currency, is not legal tender, and is subject to market risk.
Related: In India, cryptocurrency exchanges are still struggling to find banking partners.
The court said in a statement that crypto assets are inherently riskier than traditional investment products in stocks, mutual funds and other investment vehicles, requiring additional measures to protect investors. In contrast, the average small investor who watches audiovisual ads on television and websites like YouTube could suffer huge losses as a result, the court said.
The news comes as India is still trying to come up with clear rules for the cryptocurrency industry in the country, while unnamed sources within the government continue to fuel fears of an impending ban on cryptocurrencies. Despite the current regulatory uncertainty, domestic investment in cryptocurrencies in India has reportedly increased by 600% over the past year.
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