Crypto brands under the scan after Vauld’s shut down

India’s crypto market size has grown by about 40% from 2016 to 2021, which is led by the evolution of over 200 crypto start-ups.

After a popular Singapore-based crypto-trading platform Vauld suspended all its operations, other cryptocurrency brands have also come under the scanner. The decision comes amid the existing volatile cryptocurrency market in India.

Vauld was promoted by several Indian YouTubers and financial influencers who are followed by many young investors. The cryptocurrency platform has said that it has stopped the withdrawal and deposits of funds after facing a cash crunch and has stopped accepting fresh funds as well, while it continues to consult with financial and legal organisations on how to return to normalcy. Vauld blamed the volatile market conditions for this decision.

The ban of Vauld has not only brought other crypto platforms under scrutiny but also questions the authenticity of the content posted by financial influencers and YouTubers.

Speaking to afaqs!, Shivaji Dasgupta, founder and managing director, INEXGRO Brand Advisory says that in the current regulatory environment, there is very little that influencers can do to filter their endorsed brands.

“Except confirming the platform’s legal and ethical status. Especially in this rampant era of startups and the D2C space, where proof of performance is non-existent. What can and must be done is a further layer of self-regulation by ASCI, so that influencers can only be approached after a minimum period in business,” adds Dasgupta.

In May 2022, the Securities and Exchange Board of India (SEBI), had suggested that no ‘prominent public figures’, including celebrities, sportsmen’ should endorse crypto products and that the advertisement discloser should also talk about the possible violation of laws.

In June 2022, as per ASCI, 92% of all crypto advertisement violations that occurred between the months of January 2022 and May 2022 can be linked to social media influencers in the country. Most of these influencer ads were a mix of breaching ASCI’s influencer guidelines and crypto guidelines in advertising. The breaches included failure to add disclaimers around crypto trading as well as tags that noted that a particular post was a paid partnership.

Rishabh Mahendru, VP, client servicing, AdLift mentions that irrespective of the category, it’s important for influencers to declare that they are promoting a brand in a particular video for which they have been compensated.

As per Mahendru, India’s crypto market size has grown by about 40% from 2016 to 2021, which is led by the evolution of over 200 crypto start-ups.

“Where there is a lot of competition and rapid growth – it becomes important for marketers to come up with ideas to produce a lot more long and short-form educational content, which can educate the audience about the uncertainty about the category and market,” adds Mahendru.

In October 2021, Vauld’s ad-film titled ‘For Everything Crypto Just Vauld’ also caught attention. The popularity further rose and a part of the reason was the platform’s move to rope in popular financial influencers. Reportedly, influencers like PR Sundar, Ankur Warikoo, Akshat Srivastav and Booming Bulls had posted promotional content about the platform.

Dasgupta says that in any new category brands invariably ride the category narrative, as the value proposition for early adopters. This is the only way to become popular.

He shares, “If the category itself is non-grata, for business or regulatory reasons, then the brands will invariably die a natural death. So in a way, marketers are left with little choice but to plan and pray that the category is not a dud and does not succumb to the trap of speculative overpromise. Due to high business pressures, the marketers will have to act quickly as wait and watch is not an option.”

Source link

What do you think?

Written by Bitcoin

Calls for agent support as social media post reveals …

Hotglue wins Tempur ANZ social media account