New Delhi, December 23, 2023: In a significant move towards ensuring ethical and responsible growth of the Web3 sector, the Consumer Protection Guidelines prepared by the Bharat Web3 Association were presented to Shri. Ashwini Kumar Choubey, Honourable Minister of State for Consumer Affairs, Food and Public Distribution. The Guidelines were earlier released by Dr. Fauzia Khan, Honourable Member of Parliament, Rajya Sabha and Member of the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution.
Consumer protection is paramount to the success of the Web3 sector as it empowers users, addresses security concerns, promotes transparency, establishes mechanisms for dispute resolution, and provides overall credibility. Regulators globally recognize the criticality of consumer protection, making it essential to formulate and implement guidelines that prioritize consumer interests. These guidelines aim to foster transparency, accountability, and consumer trust within the emerging Web3 ecosystem.
The guidelines were developed drawing inspiration from best practices of India's financial sector regulators such as RBI, SEBI, AMFI, IRDAI, and in compliance with the Consumer Protection Act and ASCI Guidelines. Additionally, insights from consumer-focused practices in the digital assets sector in Hong Kong and the EU's Markets in Crypto-Assets Act (MiCA) were considered. Recognizing the dynamic and evolving nature of the Web3 ecosystem, these guidelines will also evolve over time, and the Association welcomes any feedback and suggestions.
"I commend the efforts of the Bharat Web3 Association for their proactive initiative in releasing the Consumer Protection Guidelines. These guidelines not only empower consumers but also set a benchmark for responsible and ethical practices in the ever-expanding world of Web3”, stated Shri. Ashwini Kumar Choubey.
"On the auspicious occasion of the National Consumer Rights Day, I applaud Bharat Web3 Association for releasing Consumer Protection Guidelines for their members. This timely action aligns perfectly with our national commitment to responsible digital transformation, while simultaneously ensuring that our citizens reap the benefits of virtual assets and at the same time safeguarding their interests. This is a model initiative for fostering a vibrant and trustworthy web3 ecosystem in India”, stated Dr. Fauzia Khan.
“BWA was set up to create awareness, conduct research, safeguard consumer interests, and foster stakeholder dialogue to nurture a thriving Web3 ecosystem in India. Central to our mission is ensuring consumer protection. While BWA members proactively exceed the minimum compliance requirements to uphold the well-being of consumers and users, presently, there are no established guidelines specifically tailored for consumer protection in the Web3 sector. To address this gap and in our pursuit of establishing BWA as a Self-Regulatory Organization (SRO) for the sector, we have introduced these guidelines.”, stated Mr. Dilip Chenoy, Chairperson, of Bharat Web3 Association.
Key Highlights of the Consumer Protection Guidelines:
1. Transparency and Disclosure: Emphasizing clear and understandable information, platforms should provide transparent pricing, disclose all costs, and maintain updated FAQs for detailed risk disclosures.
2. Suitability, Fair, and Honest Dealing: Advocating non-discrimination, consumer-centricity, and ethical practices, the guidelines discourage conflicts of interest and financial incentives driving product recommendations.
3. Complaints Handling and Grievance Redressal: BWA urges effective complaint resolution mechanisms, digital end-to-end redressal, cooperation with regulators, and consumer education programs for Virtual Digital Assets (VDAs).
4. Data Privacy & Security: Platforms are advised to implement robust data protection measures, transparently communicate data practices, and adhere to the Digital Personal Data Protection (DPDP) Act 2023.
5. Responsible Advertising: Stressing adherence to ASCI guidelines, platforms should use clear, accurate language in advertising to ensure responsible practices.
6. Regulatory Compliance: BWA emphasizes compliance with relevant laws, including CERT-In guidelines, the Prevention of Money Laundering Act (VDAs), and AML & CFT Guidelines.
The guidelines will apply to all BWA members engaged in BWA businesses within the Web3 and VDA ecosystem. Members are required to conduct annual self-compliance assessments, and non-compliance remediation procedures are outlined for prompt corrective actions.
The Bharat Web3 Association is committed to creating an environment of fairness, security, and accountability within the Web3 ecosystem. These guidelines are an initial first step in the Association’s objective of establishing itself as a Self Regulatory Organization (SRO) for the Web3 sector. The association will issue and promote these guidelines, launch awareness campaigns for consumers, collect feedback, and collaborate with regulatory bodies for effective enforcement of Consumer Protection laws.
About Bharat Web3 Association
Bharat Web3 Association is an industry body uniting leading members from India’s Web3 ecosystem. BWA is committed to raising awareness, conducting research, establishing industry standards, nurturing the Indian talent pool, protecting consumers’ interests, and encouraging stakeholder dialogue with the objective of building a buoyant Web3 ecosystem in India. As part of its mission statement, BWA strives to educate through thought leadership, collaborate with critical stakeholders, and promote our objectives as the face of the industry.
The Association’s mission is to help India realise its vision of being a leading digital economy. The Association facilitates collaboration between the regulatory bodies and the ecosystem to create awareness about the new age technology and the emerging asset classes and takes its cues from global case studies on Web3 technology use cases, its acceptance, and its diverse benefits.
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