India is set to follow in the footsteps of other countries that have banned the engagement of celebrities and influencers in the promotion and endorsement of crypto products and services.
The Indian regulatory body, SEBI, is considering halting the role played by celebrities in the endorsement of cryptocurrency, citing law violations.
This means that the deal will end all engagement of public figures in India who have been the driving force in promoting, advertising, and endorsing cryptocurrency-related products and services.
Although the crypto space has been unregulated, there have been moves by the Indian financial regulatory body to implement strict rules in the industry.
Some ads Have Misleading Information
Celebrities’ involvement in promoting crypto has its origin in the United States before spreading to India and other places. Some celebrities have misled investors by luring them to invest in a questionable crypto project, for which they were slammed with multiple charges in court.
As a result of the happenings in the U.S., authorities have begun to ask questions due to the huge influence Indian celebrities have on the people in the country—do Indian celebrities find themselves at risk?
In this case, SEBI has banned the use of voices by any popular celebrities to promote, advertise, or endorse cryptocurrency. Should any celebrity fall foul of the new rule, it may lead to a violation of the consumer protection act of the country. SEBI added that the offender risks violating other state laws like the FEMA, PMLA, and the BUDS Act.
Are There Penalties for Violations?
Indian celebrities from all spheres of economic endeavors are highly influential as they play critical roles in marketing products and promoting national consciousness among the citizens. As a result, any statement or claim attributed to them can swing in either direction, positive or negative.
The crypto space in India is no exception to the influence of celebrities, coupled with its volatility and unregulated nature in the country. This serves as a delicate matter requiring government involvement.
However, despite the absence of regulation in the crypto space, SEBI insists that the role played by celebrities in crypto endorsement needs to be curbed and has stipulated penalties for non-compliance with the new regulation.
First-time violators charged on account of false claims or misleading advertisements will be slammed with 10 lakh by the regulator. Subsequent violations attract 50 lakh and a product ban of up to three years for the crypto product involved.
It is widely reported that the Finance Ministry has directed the regulator to provide its perspective on the proposed guidelines the government is working on. A final decision towards regulating crypto product advertising and consumer protection will be rolled out as soon as all the necessary inputs have been considered.
Despite the unavailability of existing rules to oversee the crypto space, India wants to limit the involvement of celebrities. India is working on the steps it needs to take to prevent celebrities and other important public figures from promoting and endorsing cryptocurrency.