Crypto ads stopped, but marketing remains alive on Reddit, Telegram, Twitter

TThe year 2021 felt like the year of cryptocurrency. Bitcoin traded at stratospheric levels, Reddit made memes profitable, and everyone from Ayushmann Khurrana to Ranveer Singh announced crypto in India.

“This is the future,” CoinDCX announced on the front page Sunday Times‘Aaj nahi toh kal, kuch toh badlega,’ CoinSwitch Kuber declared, ‘This is India’s crypto moment,’ a cover ad by Economic Times read.

Cryptocurrency exchanges spent Rs 90 crore on TV advertising alone during IPL 2021 and World Cup T20. In October 2021, cryptocurrencies accounted for 51 percent of all TV advertising by volume.

And then everything came crashing down. The government of India expressed serious concern over the blizzard of cryptocurrency ads and how they were “misleading” the youth by “over-promising” and being “non-transparent”. Shortly after this, Blockchain and the Crypto-Asset Committee promised to stop advertising until new rules for crypto advertising were set. The crypto-influencer universe has pushed crypto-publicity into unwatchable 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 the crypto advertising trail. The crypto dream market crashed in mid-2022. Bitcoin, which peaked at around $67,000, fell to $20,000. The government of India in March decided to levy a tax of 30 percent and TDS of 1 percent on crypto investments and trading volumes in India fell by 70-80 percent. The first thing to be cut 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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“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 of the risks associated with investing in such high-risk assets. The guidelines specified that crypto companies must carry the following disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There can be no regulatory recourse for any loss from such transactions.” The body also said that virtual assets cannot include words such as “currencies”, “securities”, “custodians” or “custodians” in their advertisements.

“As an industry, advertising by category remains among the top five infringing sectors. In terms of volume, categories including games and VDA contributed 8 percent each to the total number of offensive ads in the period April 2021 to March 2022. Overall compliance, including the digital domain, was at 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 it received complaints about 453 crypto-related ads, of which 419 needed modifications, most of which came from influencer advertising. They said influencers are packaging crypto as “something cool.”

Advertising by influencers is a major concern among industry experts who say compliance by the group is lacking, but a lack of government regulation and specificity of the law is to blame. “The government has not even specified what an influencer is. You have to be specific in the law, vague statements don’t work,” said Amanjot Malhotra, country manager 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 percent of their ads comply with the guidelines.

Globally, influencers have been tapped for crypto advertising. Elon Musk was sued for promoting Dogecoin, while Kim Kardashian was fined $1.27 million for illegally naming a cryptocurrency.

Indian influencers could also be staring at paying hefty penalties for misleading ads, as authorities consider it.

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The Web 3 subculture

No advertising means no marketing. Crypto exchanges have just slipped back into sub-reddits and Telegram channels to keep the conversation going. From front page newspapers, they now find themselves in the social media channels.

But that’s where the crypto enthusiasts live. “The communities on Telegram, Reddit, Discord are huge. It’s where curious people learn about crypto, take investment tips, ask questions… they may not have hundreds of thousands of followers, but they’re very active and dense, and very important for crypto exchanges to be present on,” says Pratik Gupta, co. -founder of Zoo media which has marketed 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 one. CoinDCX has a verified channel of 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, developments in the crypto world, ask exchanges to list new coins, discuss negative marketing efforts, seek tips and offer advice. Crypto exchange is alive here.

These communities are crypto’s bread and butter. “In general, ads don’t work for crypto. It’s a peer-to-peer network and we’re focused on building a strong community, backing it up with good support and services, and focusing on social media platforms like Telegram and Twitter where users can be educated Most of the communication is through Twitter, while YouTube is effective in sending out updates, Malhotra added.

Gupta also spoke about the concerns of crypto exchanges when it comes to mainstream advertising. “The government has been chasing these companies, telling them not to do what they are doing. Market sentiment is down, so no one wants to advertise, he added.

One must remember that cryptocurrencies are not the first entities to be discouraged from marketing their product. When advertisers cannot openly promote a product, they turn to surrogates, which means brand marketing without mentioning the product. Alcohol is a classic example.

Although crypto ads are not officially banned, companies have had to skirt around promoting their product. And they’ve kind of redefined surrogate marketing.

“Crypto exchanges have invested in memes, informal channels, people teaching crypto. Although not a crypto exchange, Dream 11 is a good example. They actually turned to meme channels to understand which cricketers to choose to advertise , what tips to give in their communication, Goyal added.

Another way to advertise is informative content. WazirX, one of India’s oldest and largest crypto exchanges, says it read market sentiment way back in May and stopped advertising. According to their claim, their last sponsorship was the 2020 UEFA European Football Championship and their ads only ran on Sony LIV. But this has not stopped them from interacting with humans.

The brand has uploaded informative videos on their YouTube channel. “We used our social media to inform consumers. We have extensive videos with dejargonized crypto guides, a special section called coin reports, created by a third party, credit ratings for exchanges, blockchains and coin offers (crebaco) on different coins traded and series of reports. We also publish reports in 10 languages ​​so that they are accessible to everyone,” says Rajagopal Menon, Vice President of WazirX.

But even these videos cannot be a substitute for mass media ads. WazirX YouTube channel has only a few thousand or even triple digit views of their videos. The same is the story for other exchanges such as CoinSwitch Kuber and CoinDCX.

Also read: Lucknow to Ludhiana, small town women enter crypto world, leaving tech bros behind

What does the future look like?

In a bearish market, full of uncertainty, the revival of crypto ads does not seem to be on the horizon. Dialogue with the government also seems to be in free suspension.

Bitay’s Malhotra says India’s ad space is currently vague. “India needs detailed guidelines for marketing crypto and implementation of the same. There is also a 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,” said he.

Malhotra was also a member of the Blockchain and Crypto Assets Council, which he says worked with the government to better understand the market space. But the committee has not met for more than six months. “The advertising committee was disbanded six months ago because the government did not go ahead with the ideas given by crypto exchanges and were very strict. Since we were not able to achieve the desired results of the community, we disbanded the committee,” he says.

Crypto exchanges are waiting to see what the new fiscal year brings. But at the moment, it’s an industry gripped by confusion, and a new product is unable to advertise.

(Editing by Ratan Priya)