T2021 felt like the year of cryptocurrency. Bitcoin was trading at stratospheric levels, Reddit was making memes profitable, and everyone from Ayushmann Khurrana to Ranveer Singh was promoting crypto in India.
“This is the future,” CoinDCX announced on its front page Sunday Times,’Aaj nahi toh kal, kuç toh badlega“, declared CoinSwitch Kuber, “This is India’s crypto moment,” an ad on the front page of Economic Times read.
Cryptocurrency exchanges spent 90 crore on TV ads alone during IPL 2021 and T20 World Cup. In October 2021, cryptocurrencies accounted for 51 percent of all TV advertising by volume.
And then everything fell apart. The Government of India expressed serious concern over the flurry of advertisements from cryptocurrencies and how they were ‘fooling’ the youth by ‘over-promising’ and being ‘non-transparent’. Soon after, the Blockchain and Crypto-Asset Committee vowed to ban advertising until new rules are put in place against crypto advertising. The universe of crypto-indicators has pushed crypto publicity into subcultures and channels that are now unmonitorable – with memes on Reddit and Telegram and other peer-to-peer platforms.
It wasn’t just angry government noise that stopped the crypto ad trail. The crypto dream market crashed in mid-2022. Bitcoin, which peaked at around $67,000, hit $20,000. The Indian government in March decided to impose a 30 percent tax and 1 percent TDS on crypto investments, and India’s trading volumes fell by 70-80 percent. The first thing that was cut were the marketing budgets of crypto companies.
Crypto exchanges are now using social media, online communities, influencers and even memes to keep the buzz going.
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“Influencer Marketing”
In February 2022, the Advertising Standards Council of India drafted guidelines for advertising Virtual Digital Assets, which came into force in April. ASCI noted that the advertising of these assets has not been sufficiently informative about the risks involved in investing in such high-risk assets. Its guidelines specified that crypto companies must maintain the following disclaimer: “Crypto products and NFTs are unregulated and can be very dangerous. There can be no regulatory recourse for any loss from such transactions.” The body also said virtual assets cannot include words such as ‘currency’, ‘securities’, ‘custodians’ or ‘depositories’ in their advertisements.
“As an industry, category advertising remains among the five most violent sectors. In terms of volumes, categories including games and VDA contributed 8 percent each to total objectionable ads in the period April 2021 to March 2022. Overall compliance, including in the digital domain, was 94 percent. We have seen advertisers deploy influencers in a big way,” Manisha Kapoor, CEO of ASCI told ThePrint in an email response.
ASCI said they received complaints against 453 crypto-related ads, of which 419 needed modifications, with the majority coming from influencer ads. They said influencers package cryptocurrencies as “something cool.”
Influencer advertising is a major concern among industry experts, who say there is a lack of compliance by the group, but a lack of government regulation and specifics of the law are to blame. “The government has not even specified what an influencer is. One has to be specific in the law, vague statements don’t work,” said Amanjot Malhotra, Country Head of Bitay, a Turkey-based crypto exchange, while explaining why influencer marketing has grown.
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 percent of their ads comply with the guidelines.
Globally, influencers are attracted to crypto advertising. Elon Musk was sued for promoting Dogecoin, while Kim Kardashian was fined $1.27 million for illegally advertising a cryptocurrency.
Indian influencers could also be looking at paying heavy penalties for misleading ads as the government mulls it over.
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Web Subculture 3
No advertising means no marketing. Crypto exchanges have just returned to sub-reddits and Telegram channels to keep the conversations going. From newspapers to front pages, they already find themselves on social media channels.
But this is where crypto enthusiasts live. “The communities on Telegram, Reddit, Discord are massive. This is where curious people are learning about crypto, getting investment advice, 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,” said Pratik Gupta, together. -founder of Zoo media who have traded for a crypto client, among many others.
CoinSwitch Kuber has a strong community of almost 51,000 on Telegram, although it is not a verified channel, it is quite an active channel. CoinDCX has a verified channel with over 60,000 members in its pro community, while WazirX Discuss has more than one lakh members. In these channels, community members discuss new coins, developments in the crypto world, ask exchanges to list new coins, discuss negative marketing sentiments, ask for advice and give advice. 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, supporting it with good support and services, and focusing on social media platforms like Telegram and Twitter where users can educate themselves. Most of the communication is done through Twitter, while YouTube is effective in terms of sending updates,” added Malhotra.
Gupta also spoke about the concerns of crypto exchanges when it comes to mainstream advertising. “The government has followed these companies, asked them not to do what they are doing. Market sentiment is down, so no one wants to advertise,” he added.
It should be remembered that cryptocurrencies are not the first entities to be discouraged from marketing their products. When advertisers cannot overtly market a product, they look to substitutes, which means marketing the brand without mentioning the product. Alcohol is a classic example.
Although crypto advertising is not officially banned, companies have had to deal with marketing their product. And they have redefined surrogate marketing in a sense.
“Crypto exchanges have invested in memes, informal channels, people learning crypto. Although not a crypto exchange, Dream 11 is a good example. They actually approached meme channels to figure out which cricketers to choose to advertise, what advice to give in their communication,” Goyal added.
Another way of advertising is informative content. WazirX, one of India’s oldest and largest crypto exchanges, says it read market sentiment in May and stopped advertising. According to their claim, their last sponsorship was UEFA European Football Championship 2020 and their ads were only shown on Sony LIV. But that hasn’t stopped them from interacting with people.
The brand has uploaded informative videos on their YouTube channel. “We used our social media to inform consumers. We have extensive videos with de-argonized crypto guides, a special section called coin reports, created by a third party, Credit Ratings for Exchanges, Blockchains and coin offerings (crebaco) on various currencies that are traded and series of reports. We also release reports in 10 languages so that they are accessible to everyone,” said Rajagopal Menon, Vice President of WazirX..
But even these videos cannot replace media advertising. The WazirX YouTube channel has only a few thousand or even triple digit views on their videos. It’s the same story for other exchanges like CoinSwitch Kuber and CoinDCX.
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What does the future look like?
In a bearish market filled with uncertainty, a revival of crypto advertising does not appear to be on the horizon. The dialogue with the government also seems to be in free suspension.
Bitay’s Malhotra says the advertising space in India is currently unclear. “India needs detailed guidelines on crypto marketing and implementation of the same. There is also a need for a separate department for advertising monitoring. Currently, the crypto story in India is volatile. If you keep people in limbo, the industry won’t grow,” he said.
Malhotra was also a member of the Blockchain and Crypto Asset Council, which he says was working with the government to better understand the market space. But the commission has not met for more than six months. “The advertising committee was disbanded six months ago because the government was not moving on ideas given by crypto exchanges and was too strict. Since we were unable to achieve the results desired by the community, we disbanded the committee,” he says.
Crypto exchanges are waiting to see what the new financial year brings. But currently it is an industry stuck in confusion and a new product is unable to be advertised.
(Editing by Ratan Priya)
