The Indian government “strongly feels” that advertisements by cryptocurrency exchanges that promise customers wild profits and are not transparent about the volatile nature of such trading must be prohibited, according to a memo outlining the summary of a meeting between the Indian Prime Minister Narendra Modi and several stakeholders on Saturday.
A consensus has been reached by several stakeholders including New Delhi that irresponsible advertisements are misleading youths in the nation and must be stopped, according to the memo, which was shared with reporters.
In recent weeks, leading cryptocurrency exchanges including Andreessen Horowitz-backed CoinSwitch Kuber and B Capital Group-backed CoinDCX have launched ads that many individuals have deemed highly irresponsible.
Indian crypto exchanges have been very irresponsible in making absurd and outright false claims in their relentless ads.
This nascent industry should be careful not to discredit themselves in the eyes of regulators in particular. https://t.co/ae482BV1pb
— Rajeev Mantri (@RMantri) November 11, 2021
These cryptocurrency ads during cricket matches are very well targeted, indeed. But the idea of making crypto look easy and safe is scary! Esp. if you don’t understand it.
If you get it, great. If you don’t, it’s easy to slip into FOMO. Be careful with your investments, folks!
— Praval Singh (@Praval) November 7, 2021
With all the hype around crypto ads yesterday, I was made aware that many founders/independent operators working in the space have now shifted base to Dubai with frequent travel to India. Also, the local govt’s policy towards crypto is a big factor behind people immigrating there
— Sehaj Singh (@sehaj23) October 25, 2021
I am watching #T20WorldCup2021 on HotStar, and crypto universe has taken over nearly all ad spots.
— Vijay Shekhar Sharma (@vijayshekhar) October 24, 2021
Lawmakers in India, where currently there isn't an official framework to oversee cryptocurrency and their trading, have held conversations with several stakeholders in recent quarters to formulate a path forward for the industry.
The move comes as an increasingly growing number of Indians are beginning to buy Bitcoin and other cryptocurrencies for the first time in their lives. Several Bollywood stars including legendary Amitabh Bachchan and Ranveer Singh, who has starred in several of the country's biggest blockbusters, have promoted cryptocurrency trading in recent weeks.
On their part, CoinSwitch Kuber and CoinDCX have started podcasts and other collaborations with industry players to offer content that help youngsters make informed investment decisions.
Lawmakers in India have also expressed concerns around potential misuse of using crypto trading vehicle for laundering money and financing terrorism efforts.
To curb this, the government officials have indicated that they may require crypto exchanges to perform a full KYC of their customers. Most cryptocurrency exchanges have preemptively complied with this suggestion and some have prohibited users from moving their tokens and coins to private wallets or other exchanges.
But that might be the extent to which the Indian government plans to get involved with cryptocurrency at least in the immediate future.
One high-profile politician indicated to an industry executive earlier this month that the country will come up with laws that welcome innovation around blockchain technology and is open to foreign investment into local projects, a person directly familiar with the matter told TechCrunch.
The government's conviction about such a potential move has grown stronger in the wake of the Chinese government cracking down on cryptocurrency transactions, the person said, requesting anonymity as the matter is private.
In the Saturday memo, it was relayed that the government is "cognizant of the fact that [blockchain] is an evolving technology hence the government will keep a close watch and take proactive steps."