The year 2021 felt like cryptocurrency’s year. Bitcoin was trading at stratospheric levels, Reddit was making memes profitable, and everyone from Ayushmann Khurrana to Ranveer Singh was advertising crypto in India.
‘This is the future,’ announced CoinDCX on the front page of Sunday Times, ‘Aaj nahi toh kal, kuch toh badlega,’ declared CoinSwitch Kuber, ‘This is India’s crypto moment’, a front-page advertisement of Economic Times read.
Cryptocurrency exchanges spent Rs 90 crore just on television advertisements during IPL 2021 and World Cup T20. In October 2021, cryptocurrencies accounted for 51 per cent of all advertisements on TV in volume.
And then it all came crumbling down. The Government of India expressed serious concern over the blizzard of ads by cryptocurrencies and how they were ‘misleading’ the youth by ‘over promising’ and being ‘non-transparent’. Shortly after this, Blockchain and Crypto-Asset Committee vowed to stop advertising until new rules vis-à-vis crypto advertising were set. The crypto influencer universe has pushed crypto publicity into un-monitorable subcultures and channels now – with memes on Reddit and Telegram and other peer-to-peer platforms.
It wasn’t just the government’s angry snort that stopped crypto advertising trail. The crypto dream market crashed in the middle of 2022. Bitcoin, which peaked at around $67,000 tanked to $20,000. The government of India in March decided to levy a tax of 30 per cent and TDS of 1 per cent on crypto investments and trade volumes of India dropped by 70-80 per cent. The first thing to get slashed were the marketing budgets of crypto companies.
Crypto exchanges are now leveraging social media, internet communities, influencers and even memes to keep the buzz going.
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On February 2022, Advertising Standards Council of India devised guidelines for advertising of Virtual Digital Assets, which came into effect in April. ASCI noted that the advertising of these assets hasn’t been adequately informative about the risks involved with investing in such high-risk assets. Its guidelines specified that crypto companies must carry the following disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” The body also said that virtual assets cannot include words like ‘currencies’, ‘securities’, ‘custodians’ or ‘depositories’ in their ads.
“As an industry, advertising by the category remains among the top five violative sectors. In terms of volumes, categories including gaming and VDA contributed 8 per cent each to the total objectionable ads in the period April 2021 to March 2022. Overall compliance, including in the digital domain, stood at 94 per cent. We have seen advertisers deploy influencers in a big way,” Manisha Kapoor, CEO of ASCI told ThePrint in an email response.
ASCI said that they received complaints against 453 crypto-related ads, of which 419 needed modifications, with most coming from influencer advertising. They said influencers package crypto as ‘something cool.’
Advertising by influencers is a major concern among industry experts who say compliance by the group is lacking, but lack of government regulation and specificity of law is to be blamed. “The government hasn’t even specified what an influencer is. One has to be specific in law, vague statements don’t work,” said Amanjot Malhotra, Country Head of Bitay, a Turkey-based crypto exchange, while explaining why influencer marketing has increased.
Crypto influencers in India like Naval Ravikant, Aditya Singh, Sapna Singh, Shivam Chunejja, Pankaj Tanwar have more than one lakh followers. According to ASCI, only 77 per cent of their ads are compliant to the guidelines.
Globally, influencers have been pulled up for crypto advertising. Elon Musk was sued for promoting Dogecoin, while Kim Kardashian was fined $1.27 million for unlawfully touting a crypto currency.
Indian influencers may also be staring at paying heavy penalties for misleading ads, as the government deliberates on it.
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The Web 3 sub culture
No advertising doesn’t mean no marketing. Crypto exchanges have just slid back into sub-reddits and Telegram channels to keep the chatter going. From front page newspapers, they now find themselves in the social media channels.
But that is where the crypto enthusiasts live. “The communities on Telegram, Reddit, Discord are massive. That’s where curious people are learning about crypto, taking investment tips, asking questions… they may not have hundreds of thousands of followers but they are very active and tight, and very important for crypto exchanges to be present at,” said Pratik Gupta, co-founder of Zoo media who have marketed for a crypto client, among many others.
CoinSwitch Kuber has a strong community of nearly 51,000 on Telegram, though it’s not a verified channel, it’s a fairly active one. CoinDCX has a verified channel with over 60,000 members on its pro community, while WazirX Discuss has more than one lakh members. On these channels, community members discuss new coins, development in the crypto world, ask exchanges to list new coins, discuss the adverse marketing sentiments, seek tips and dole out advices. Crypto exchanges are alive here.
These communities are the bread and butter of crypto. “In general, ads don’t work for crypto. It’s a peer-to-peer network and we’re focused on building a strong community, back it up with good support and services, and focus on social media platforms such as Telegram and Twitter where users can be educated. Most of the communication is done through Twitter, while YouTube is effective in terms of sending out updates,” Malhotra added.
Gupta also talked about the apprehensions of crypto exchanges when it comes to mainstream advertising. “The government has chased these companies, asked them to not do what they’re doing. The market sentiment is down, so nobody wants to advertise,” he added.
One must remember that cryptocurrencies aren’t the first entities to get discouraged from marketing their product. When advertisers cannot openly market a product, they turn their gaze to surrogates, which means brand marketing without mentioning the product. Alcohol is a classic example.
Even though crypto ads are not officially banned, the companies have had to skirt around marketing their product. And they have redefined surrogate marketing in a sense.
“Crypto exchanges have been investing in memes, informal channels, people who teach crypto. Though not a crypto exchange, Dream 11 is a good example. They actually approached meme channels to understand what cricketers to choose to advertise, what tips to give in their communication,” Goyal added.
Another way of advertising is informative content. WazirX, one of India’s oldest and biggest crypto exchanges, says it read the market sentiment way back in May and stopped advertising. As per their claim, their last sponsorship was 2020 UEFA European Football Championship and their ads only ran on Sony LIV. But this hasn’t stopped them from interacting with people.
The brand has been uploading informative videos on their YouTube channel. “We used our social media to inform consumers. We have extensive videos with dejargonised crypto guides, a special section called coin reports, created by a third party, Credit Ratings for Exchanges, Blockchains and coin offerings (crebaco) on various coins being traded and series of reports. We also put reports out in 10 languages so it’s accessible to all,” said Rajagopal Menon, Vice President of WazirX.
But even these videos can’t be a replacement for mass media ads. WazirX YouTube channel has only a few thousand or even triple-digit views on their videos. Same is the story for other exchanges like CoinSwitch Kuber and CoinDCX.
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What does the future looks like
In a bearish market, riddled with uncertainties, the revival of crypto ads doesn’t seem to be on the horizon. Dialogue with the government also seems in free suspension.
Malhotra of Bitay says India’s ad space currently is vague. “India needs detailed guidelines on marketing crypto and implementation of the same. There is also need for a separate department for monitoring ads. Currently, the narrative of crypto in India is fluctuating. If you keep people in uncertainty the industry will not grow,” he said.
Malhotra was also member of The Blockchain and Crypto Assets Council, which he says was working with the government to understand the market space better. But the committee hasn’t met in more than six months. “The committee on advertising was dissolved six months ago because the government wasn’t moving on the ideas given by crypto exchanges and was very strict. Since we were unable to meet the desired results by the community we dissolved the committee,” he says.
Crypto exchanges are waiting to see what the new financial year brings. But currently it’s an industry gripped in confusion, and a novel product is unable to advertise.
(Edited by Ratan Priya)