Sunday, February 5, 2023

Indian Celebrities Collaboration With Crypto Exchanges For Promotion Could Be Risky

Today, cryptocurrencies are being promoted like necessity goods in India. Many social media influencers, sports and Bollywood personalities collaborated with the crypto exchanges to advertise crypto investment on the internet.

Many Indian crypto exchanges like CoinDCX and CoinSwitch Kuber have partnered with celebrities, who talks about financial literacy through various medium. They encourage youngsters in India to start investing in digital currency for their future. 

As a part of the promotion, the trading platform also offers coupons to the users, which they can further exchange for cryptocurrencies.

Celebrities Promoting Cryptocurrencies In India

Initially, it was difficult for the crypto industry to make its base in India, however, slowly with the help of several celebrities it became easy for the exchanges to spread their network in the country. 

These celebrities are from different backgrounds, like Tanmay Bhat, Samay Raina and Aishwarya Mohanraj are Indian stand-up comedians. Whenever these comedians get time and opportunity they promote cryptocurrency using social media platforms. 

YouTube sensation Ashish Chanchalani is also a part of the crypto industry. He regularly shares his views on cryptocurrency on various social media platforms like YouTube, Instagram and Twitter. 

We can also find many videos of Tanmay Bhat on YouTube in which he shares his knowledge on cryptocurrency to educate people. Even the internet content creator Kusha Kapila, Dolly Singh and Vishnu Kaushal use their Instagram account to promote digital assets. 

The exchanges in India mostly contact the social media influencers for their promotion because of their reach among people. 

Apart from them, celebrities from the Bollywood industry, including Radhika Apte, Kunal Roy Kapoor and Manoj Bajpayee, also promote digital assets in the country. 

Also, TV host Danish Sait, cricketers Ishant Sharma and Dinesh Karthik and poet Priya Malik are part of the crypto industry.

In December 2020, Nischal Shetty, the CEO of WazirX, released a statement, informing, “Social media acts as a way to trust the company. In India, the industry isn’t regulated yet. The trust factor is important.”

He further stated, “Back in 2017, there were a lot of crypto scams and we didn’t have a crypto community. Today, no one will trust a brand-new website if no one within the online community is talking about it.”

A few months ago, CoinSwitch Kuber initiated a new campaign #makeaswitch and #tradeKarBefikar with an aim to attract youngsters and tech-savvy Indians. In order to promote its campaign, the Bengaluru-based crypto exchange collaborated with Kapoor, Bajpayee and Sait. 

CoinDCX is another Indian crypto exchange that launched a digital campaign #BitcoinLiyaKya. The aim of this campaign was to attract more and more users. 

Those people, who joined the crypto trading platform at that time, were rewarded with free bitcoin worth Rs.100 ($1.35) through a voucher code.

As per CoinDCX, a few of the winners also received 1 bitcoin worth Rs. 32 lakh.

However, this trend of offering free bitcoins to new users has become very common among crypto exchanges, which now has given a boost to memes. 

Why Crypto Promotion Is Risky In India?

Initially, Indians were not much fond of cryptocurrency, but gradually, it started becoming popular in the country. 

As per data released by Chainalysis, India invested around $6.6 billion (Rs. 49,189 crores) in cryptocurrency, till May 2021. At present, the country ranks 11 out of 154 countries in terms of cryptocurrency adoption. 

The advertising and marketing campaign by crypto exchanges have helped the industry in its growth. 

But as we all know, everything in a market comes with a risk, the same is with cryptocurrency. While releasing their advertisement, the exchange does not reveal the risks associated with investing in cryptocurrencies.

The celebrities campaigning for these crypto trading platforms are being followed by youngsters, who actually do not know the repercussions of investing in cryptos without any research.

It is true most Indians started investing in cryptos because of FOMO, without realizing that they should first read and learn about it.

Harish Bijoor, the founder of Harish Bijoor Consults Inc., has recently stated, “Until the regulation is sorted, social media influencers must stay wary and even steer clear of participation. The influencer must influence on the basis of clear guidance and path. Not an iffy one.”

Presently, the Indian Government is working on the regulatory framework for cryptocurrencies and it appears that the authorities would take a bit more time for this. But before that, if the celebrities still keep on promoting digital assets in the country, then they might land into trouble because some of the crypto exchanges in India are not safe and reliable for investment. 

A case happened in 2018, where the founder of GainBitcoin, a Pune-based crypto company, misled over 8000 people and gained a total of Rs. 2000 crore from them. However, as the mystery of this company unfolded the founder was taken into custody.

A month ago, Ayush Shukla and Vikash Kumar, advocates at Delhi High Court, filed a plea specifying that the crypto advertisements should be released with risk disclaimers to warn the viewers appropriately.

As mentioned earlier, the government has not released any regulatory framework crypto industry. However, the industry has started to taking initiative by itself. Recently, one of the industry bodies popularly known as Blockchain and Crypto Assets Council announced that it will soon introduce self-regulatory guidelines on advertising to regulate crypto advertisements.

Google Introduces Crypto Ad Rules

In March 2021, the world’s largest ad network Google banned crypto ads on its platform. But on August 04, the platform opened its advertising network to only those crypto exchanges and wallets which are register with the US financial authorities. 

The improved version of Google ad regulation has paved way for American crypto exchanges, as from now, they can freely initiate their promotion. But for other countries, this is considered to be a big threat. 

In India, it has become an easy task for the local players to attract more investors to their platforms, but it is highly risky, therefore, it is important for the government to bring in a law to protect the users from being misled by any crypto trading platform.

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