Big blow to Cryptocurrency! Singapore looks to protect people from financial harm
Singapore’s financial regulator told companies in the cryptocurrency industry to refrain from advertising their services.
Singapore's financial regulator told companies in the cryptocurrency industry to refrain from advertising their services to the public, in line with the city-state's desire to curb retail speculation in volatile digital assets. Service providers should only market their activities on their own websites, mobile applications, or official social media accounts, the Monetary Authority of Singapore said Monday in a statement. The guideline will cover a broad array of businesses, from banks to payment service providers and crypto exchanges.
“MAS has observed that some DPT service providers have been actively promoting their services through online and physical advertisements or through the provision of physical automated teller machines in public areas,” the regulator said, referring to what it calls digital payment tokens, its preferred terminology for cryptocurrencies. That could fuel speculation among traders who don't fully grasp the risks, the MAS said.
In embracing crypto, Singapore is trying to balance the benefits of financial innovation with the risks stemming from retail traders investing in tokens prone to wild price swings. Some billboards advertising digital-asset exchanges in the city-state last year have since been taken down.
Chia Hock Lai, co-chairman of the Blockchain Association Singapore, said he agrees that cryptocurrency isn't a suitable asset class for most retail investors. But there are other ways of protecting inexperienced people from financial harm, he said.
“One alternative is to classify cryptocurrencies as ‘specified investment products,' much like structured warrants or futures, whereby a retail investor will have to go through an assessment before they could invest in cryptocurrencies,” he said. “Some retail investors, especially the younger ones, are pretty savvy about cryptocurrencies.”
Singapore's moves to nourish a fully regulated crypto industry -- after China last year effectively outlawed most of the sector -- has caused startups to flock there. Some 180 companies have applied for permits to operate a regulated cryptocurrency business there.
Among firms that have publicly advertised their services is Crypto.com, the digital-asset exchange that relocated to Singapore from Hong Kong last year. The company in November ran a billboard advertisement on the Orchard Road shopping belt that said “Fortune favors the brave.” That sign has since been taken down. A Crypto.com representative declined to comment.
“Fair and responsible advertising is a sensible approach, and this is already prescribed under different asset classes regulated by MAS,” said Nizam Ismail, whose Ethikom Consultancy advises financial firms on compliance. “That being the case, it is superfluous to put restrictions on venue and place of advertising.”