Singapore Issues Warning Against Public Crypto Advertising

MAS Bans Crypto Services Promotion in Public

According to new guidelines published on Monday (January 17, 2022), the MAS said that digital payment token (DPT) providers were prohibited from marketing their services targeting the Singaporean public. The financial regulator stated that cryptocurrency firms should not advertise to customers via public transport, social media platforms, third-party websites, magazines and broadcast media.

Also, the central bank banned the use of social media influencers to promote crypto offerings, while also discouraging crypto firms from setting up cryptocurrency ATMs, stating that these kiosks also promote virtual currency services to the public.

The financial regulator added that the ease of using crypto ATMs could lead to impulsive trading by Singapore retail traders, without considering the risks associated with cryptocurrency. A statement from MAS said:

“MAS stresses that DPT service providers should conduct themselves with the understanding that trading of DPTs is not suitable for the general public. These Guidelines set out MAS’ expectation that DPT service providers should not promote their DPT services to the general public in Singapore.”

However, the central bank said that crypto businesses could advertise their service on their official websites and social media handles, but warned against trivializing the high risks of cryptocurrency trading.

Meanwhile, the new set of guidelines applies not only to crypto services licensed under Singapore’s Payment Services Act (PSA) but also to cryptocurrency firms under the transitional exemption. Banks and other financial institutions that offer virtual currency services will also adhere to the new MAS guidelines.

Singapore has seen an influx of cryptocurrency companies into the city-state, primarily because of its robust crypto regulatory framework. Since the implementation of the PSA back in 2020, the MAS has received 180 applications from firms looking to offer DPT services in the city-state.

As of January 2021, only received in-principle approvals, with 60 firms withdrawing their DPT license applications and the MAS rejecting three approval requests.

Regulators Crackdown on Crypto Advertising

Meanwhile, regulatory agencies across the globe have expressed concerns about the growing crypto advertising. The lack of robust regulation of the cryptocurrency market, in general, have led regulators to tighten their scrutiny of the nascent industry.

The United Kingdom is one of such countries which have clamped down on crypto advertisement. The country’s Advertising Standards Agency (ASA) has, in recent times, ruled against some crypto ads which the agency deemed irresponsible and misleading.

According to ASA, these cryptocurrency promotions failed to clearly state the risks associated with crypto investment and supposedly took advantage of customers’ lack of experience in the nascent industry.

Some of the companies affected by ANA’S crypto ad ban include eToro, Luno, Coinbase Europe, Kraken, Exmo, Payward, and Coinburp. The UK agency also banned crypto ads from pizza chain Papa John’s.

The Comisión Nacional del Mercado de Valores (CNMV), Spain’s national securities market regulator also recently issued new guidelines for cryptocurrency influencers. According to the Spanish regulator, influencers would now have to state if they are being paid for the crypto promotions.

If the influencers are paid, they would need to ensure that their posts are clear, impartial, and balanced about the risks of crypto investments, and also mention that investing in cryptocurrency was not regulated in Spain, unsuitable for retail investors, and could result in huge losses.

Furthermore, the CNMV stated that influencers or outlets with over 10,000 followers in Spain, would need to notify the regulator 10 days before carrying out a crypto ad campaign. Failure to comply with the rule could cost the influencer or platform a fine as high as €300,000 ($341,000).

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