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Last week, crypto exchange platform Vauld suspended its transactions citing volatile market conditions and financial difficulties with the partners. The crypto exchange had been promoted heavily in India by top financial influencers aka 'finfluencers' like Akshat Srivastava, Ankur Warikoo, and more for the past few months. 

Youngsters who are the primary audience of these finfluencers had invested a considerable amount of money thinking the platform is safe and trustworthy as a number of established names were promoting it. 

However, now that the young investors are left stranded, a number of people have questioned the role influencers had to play and about fixing their accountability. tried to find out if it was really an influencer's fault and if not then where does the buck stop? 

While some agree that influencers should take accountability, some believe that the lack of regulation in the sector is to be blamed. 

Ankur Warikoo

Ankur Warikoo, one of the top influencers in the country who had also promoted Vauld, revealed that he also has some capital stuck just like others. “For Vauld, there was back and forth with my questions for 4+ months with Darshan (Co-Founder of Vauld) and his team,” added Warikoo. 

“While promoting brands I personally operate with skin in the game. I only endorse brands that I use myself or whose founders I know well from before. I ask myself if my endorsement doesn’t work out, do I also get impacted? The answer needs to be yes.” 

Raghav Dudeja

As per influencer Raghav Dudeja, the purpose of the influencer is to educate the audience about the ways of investing. He said even if it is an endorsement, investors should use their own due diligence.

“Even I lost a lot of money with Vauld and I knew about it before influencers like Ankur had endorsed it.” 

He added, that many considered the platform to be extremely safe and that is why influencers cannot be held accountable. 

Jay Kapoor

“When it comes to the web3 space, it is still very new and we all are trying to make sense of it as we go along. Finfluencers aren’t just limited to web3 products, other products have turned out to be really useful. The stock market has existed for decades whereas the Web3 products, and companies are new and all influencers do want all their listeners to do their due diligence. So, I don’t think this has impacted the credibility in any way but it has made all of us more cautious,” said influencer Jay Kapoor. 

“Some people do give out recommendations to their audience when they have a personal stake in the assets and I think that’s highly unethical to do. As an influencer, you have a responsibility to your audience of letting them know that the product being talked about has sponsored the video and they need to do their own research before investing. But even with all the precautions, we don’t control the market, no one does. The onus of a bad investment eventually falls onto the investor. But as influencers, we need to do our part to be aware and educate the audience the best we can,’ he added. 

As per digital creator Rasleen Grover, “Influencers need to be honest and maintain their integrity. They should use their platform judiciously and acknowledge their mistakes. An influencer who only works for money and lacks integrity can never be trusted. To establish credibility, it is important that they are transparent with their own setbacks and successes as investors and what they think is best.” 

“These opinions, however, should only be treated as opinions by the viewer, not facts. It is also important that they add disclaimers to their content, such as those seen in mutual fund advertisements,” she added. 

More regulation needed in the crypto space? 

From an advertising perspective, the ASCI (Advertising Standards Council of India) released a set of new guidelines for crypto-related entities in February 2022. The Government had also imposed a levy of 30% on income from the transfer of virtual assets and a 1% tax at source on all crypto transactions. Other than this currently, the space remains mostly unregulated in India. A crypto bill has been long-awaited to create a framework for digital currencies.

As per experts while the government has some regulations in place for the advertising and promotions of the crypto industry, there need to be some regulations at the operational level too. 

As per Dudeja, if the space was regulated by the government, there could have been a way out for the company by either filing for bankruptcy or at least the consumer could have been secured in some way or the other. 

“We are at a very nascent stage and even the government needs to consider a lot of factors to make rules that aren’t too restrictive but are formulated in a way that the bad players can be penalised,” said Kapoor. 

As per Grover, a digital creator, although not illegal, cryptocurrencies are discouraged by the government. She said for the influencer, the primary challenge would be to work within these boundaries and encourage people to invest.

“The influencer has a pivotal role in swaying people towards investing in a particular blockchain currency. Some start-ups rely solely on social media platforms for marketing. However, with the government coming in, this could get tricky. The new 30% cryptocurrency tax and other regulations made in this year's budget make it highly likely that people might refrain from such investments,” Grover said on a concluding note.