With possible criminal infractions, celebrity sponsorship of cryptocurrency in India would soon come to a stop.
SEBI predicts that all significant public personalities, including athletes, will stop making deals. In several markets, like India, the new crypto industry severely uncontrolled, necessitating strict regulations.
The craze began in the United States before spreading to India. Multiple lawsuits filed when two powerful celebrities deceived investors about ignorant crypto. The immediate question came in the aftermath of the disaster.
Are Indian celebrities in the same boat? SEBI made it clear in their statement that using the voice of any popular figure for crypto advertisements/endorsements is not acceptable. If the celebrity in question does not follow the law, it could result in a violation of the Consumer Protection Act. There is also the possibility of prosecution for possible violations of other laws such as FEMA, the BUDS Act, the PMLA, and others.
Penalties for Violation
In India, celebrities from all walks of life wield enormous power. Every statement or assertion they make has the potential to go either way. This is especially true in the very volatile Bitcoin market. Because cryptocurrency is still unregulated, there is no space for error in this delicate situation.
The CCPA can fine a first-time celebrity violator up to ten lakh dollars for fraudulent statements or even deceptive advertisements. Repeated violations can result in a fine of up to Rs. 50 lakh and a three-year ban from selling any other items.
The Finance Ministry has also requested the regulator’s opinion on advertising. They also included the rules of the Advertising Standards Council of India (ASCI). Hindu Business Line contributed this. A final decision to issue a clear set of recommendations under the protection act to avoid deceptive advertisements will soon publicize.
SEBI, India’s securities and exchange board, has suggested, if not outright prohibited, celebrity crypto endorsements. In India, there are no specific restrictions limiting the use of cryptocurrencies. The anti-celebrity endorsement rule requires. The legal uncertainty surrounding cryptography has existed for a long time.
The classification of cryptocurrency as virtual digital assets, or VDA, was made only for tax purposes. Pankaj Chaudhary, the junior finance minister, released a statement in parliament. According to the proposed section 115BBH of the Income-tax Act of 1961, a loss arising from the transfer of a VDA would not allow to offset against income arising from the transfer of another VDA.
He also stated that the costs of infrastructure involved in the mining of VDAs will not consider as acquisition costs. Because this is a capital expense, it is not deductible when calculating the gains.