Indian Regulatory Body SEBI Ceases “Celebrity Endorsement” for Crypto

·2-min read

Key Insights:

  • India’s Securities and Exchange Board has suggested against using celebrities to promote crypto.

  • Crypto is not yet regulated in India, and use without understanding it may cause a violation of the law.

  • Currently, the country has deployed a 30% tax on crypto transactions.

In a suggestion to the Parliamentary Standing Committee on Finance last month, the Securities and Exchange Board of India (SEBI) stated that no prominent public figures, including celebrities and sportsmen, should be allowed to promote cryptocurrencies in the country.

“No High Profile Promotion”

Cryptocurrency, although it has been prevalent in India for years now, from a regulatory standpoint, is still in its infancy.

Furthermore, due to a lack of overseeing authority body, any and every legal responsibility and decision making falls at the hands of the SEBI.

Thus, the regulatory body recently suggested that its best to avoid mass promotion of an asset class that is neither regulated nor recognized currently.

The SEBI also suggested that the advertisement disclosure should also talk about the possible violation of laws that may occur from the rampant use of cryptocurrencies (Bitcoin, Ethereum, etc.).

In line with the suggestion, a source cited SEBI stating,

“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.”

Beyond this, the regulatory body also suggested adding to the disclaimer that “dealings in crypto products may lead to prosecution for possible violation of Indian laws such as FEMA, BUDS Act, PMLA, etc.”

The original guidelines pertaining to advertisements related to cryptocurrencies in the country read,

“Since this is a risky category (VDAs), celebrities or prominent personalities who appear in such advertisements must take special care to ensure that they have done their due diligence about the statements and claims made in the advertisement, so as not to mislead consumers.”

This is why the SEBI is also looking to put an end to the use of celebrities for crypto endorsement.

India and Crypto

The government has had its run-ins with the crypto community in the past.

However, after recognizing the expanse of crypto in India, the Finance Ministry decided to levy a 30% tax on transactions concerning cryptocurrency.

The decision came without establishing any law or regulatory authority.

Recently, the country’s Goods and Service Tax (GST) Council reportedly considered an additional 28% tax on all cryptocurrency-related activities.

While no formal confirmation has been received yet, it does worry the country’s crypto community about the future of digital assets in India.

This article was originally posted on FX Empire

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