Singapore takes action against ads for high-riskists crypto trading

The Singapur financial supervisory authority limits the marketing of cryptocurrency services in the city -state, which means a further setback for providers of services for digital assets that want to establish themselves in the Asian financial center.

The Monetary Authority of Singapore published a number of guidelines on Monday that instruct crypto companies, their offers to small investors in public space, both physically and virtually, no longer to market or advertise, and describes trade in such assets as "highly risky and not suitable for the general public". “.

The guidelines are not legally binding, but the announcement is made, since the authorities have already disappointed several companies with the slow approval pace for platforms who want to work in Singapore.

From now on, cryptocurrency players should not customers by ads on social media platforms or other public websites, in public transport such as buses and trains or in the places they hold, or by radio and print media. You will also be prevented from providing physical ATMs to issue crypto tokens.

These service providers for digital assets should also not be external parties, such as

However,

You can continue to market or advertise on your own corporate websites, mobile applications or official social media accounts.

"The trade in cryptocurrencies is very risky and not suitable for the general public," said Loo Siew Yee, deputy MAS manager for politics, payments and financial crime, in a press release on Monday.

"DPT service providers should therefore not represent the trade with DPTs in a way that trivializes the high risks of the trade with DPTS, and also do not participate in marketing activities that are aimed at the general public," she added, referring to digital payment stands that the central bank of Singapore is used as broad classification as Bitcoin, Ethereum and similar assets that are supported by blockchain technology.

The Foris Dax Asia, based in Singapore, who operates the Crypto.com trading platform, has applied its portal in the cinemas of the city state. The company has even worked hard to set the American actor Matt Damon as a front man for his advertisements.

On multiplex screens in Singapore, the Hollywood star was published in an advertising video with the slogan "Fortune Favors the Brave" for Crypto.com before the films started.

According to the MAS guidelines, such ads should no longer be used in public locations to market the goods from DPT players.

"The Monetary Authority of Singapore (MAS) requires us to give you this risk -making (DPT) as a customer of a service provider for digital payment," says a liability exclusion on Crypto.com. "Please note that you may not be able to get back all the funds or DPTs you paid for foris dax asia pte ltd if the business of Foris Dax Asia PTE Ltd fails."

There is no defined punishment in the event that cryptododia providers do not follow the guidelines, but the financial supervision will probably take note of companies for digital assets that ignore public security precautions, which in turn can have an impact on whether they may continue to work in Singapore.

While the marketing framework came into force on January 17, DPT players receive a certain scope to discontinue advertising measures that contradict the guidelines, for example if certain contractual obligations must be met.

The Central Bank of Singapore takes up a attitude in this matter as Great Britain, where the advertising supervisory authority has passed to proceed against "misleading" marketing of crypto players. The guidelines of the city state also come, since regulatory authorities in all jurisdiction exacerbate the examination of the emerging crypto sector, which is known to operate across borders and apart from the supervisory authority.

But for crypto players, the MAS's step is to limit their ability to address customers from Singapore, to limit, to the difficulties with which many of them are already confronted when they work in the city state.

These companies have hurried in recent years to settle in Singapore to use his status as a prominent hub for the growth of financial technology services. They cover the spectrum of stock market platforms for crypto handles to investment managers and financial advisors who take care of digital wealth sports folios for the rich. However, the authorities have set high standards for the granting of licenses, since so far only one handful of

According to the Payment Services Act by Singapore, companies that offer offers related to DPTs are regulated mainly for money laundering and terrorist financing risks and technology risks.

To be legal, you must apply for licenses in the "Digital Payment Token Services" area. Since the law came into force in January 2020, around 180 approval applications have been made for such services.

But only five of them received a basic permit, said the MAS. Sixty DPT applications were withdrawn while three were rejected. This failure rate is in blatant contrast to the image of Singapore as a crypto -friendly location compared to other jurisdiction such as China that has banned the digital asset.

In view of the rapidly changing landscape for the industry, the MAS said that it would continue to check the provision of DPT services for the public by the providers and update these guidelines if necessary.

The regulatory authority had crypto stakeholders and the Singapore Fintech Association, a lobby group for technology-based financial companies in the city-state to ask feedback on the guidelines before they were published.

The SFA said in a statement that the new framework shows that Singapore Blockchain and Cryptocurrencies continue to consider innovations that have the potential to gain a mass acceptance in the community, and admitted that such an introduction should be "balanced with pragmatic guardrails".

"The technology behind the blockchain has the potential to open up many exciting opportunities for the industry and bring advantages to consumers," said Shadab Taiyabi, President of the SFA. "In order to open the doors to the innovation, a system of checks and balances must also be set up before the consumers fully recognize and understand the new tools."

A version of this article was first published on January 17, 2022 by Nikkei Asia. © 2022 Nikkei Inc. All rights reserved

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