India's SEBI proposes ban on celebrity endorsement of cryptocurrency/NFTs, violations on advertisements
Red flag raised for actors, athletes and all public figures.
The Securities and Exchange Board of India (Sebi) has red-flagged prominent public figures, including celebrities, sportsmen, etc. endorsing crypto products in any kind of advertisement.
SEBI said that crypto assets are neither defined as securities under Securities Contracts (Regulation) Act, 1956 or SCRA, nor are they notified as securities by the Central Government.
As on date, crypto is not regulated and has been named as virtual digital assets (VDA) for taxation purpose only.
A BusinessLine report, citing sources, said that SEBI communicated its view to the Parliamentary Standing Committee on Finance when members quizzed officials on various aspects of crypto.
The regulator then submitted a detailed response in writing and claimed that since crypto products are unregulated, prominent public figures shall not be used for endorsement/advertisement of crypto products.
The Advertising Standards Council of India (ASCI) said that it isn't discussing changing its guidelines on crypto advertisements, clearing the air on its position as an important stakeholder on a suggested ban on Indian celebrities endorsing crypto products.
"This appears to be the view of SEBI in ongoing discussions within the government," said Manisha Kapoor, the ad council's CEO.
Aside from the ASCI advertising guidelines, a few other recently introduced regulations include an order for digital currency exchanges to store user information for at least five years and the introduction of a 30% tax on digital currency gains.
Despite these already established requirements, a lot of uncertainty still exists in the digital currency industry. This is because there is yet to be a fully comprehensive regulatory framework for digital assets. Fears also exist that India could ban digital assets.
However, in an important clarification, SEBI told the parliamentary panel that If crypto assets are not banned then there is a need for feature-based characterization of the tokenized version of assets, which may attract supervision of different sectoral regulators.