Disclaimer: Opinions expressed below belong solely to the author
Last year, Crypto.com was taking over Singapore’s MRT stations. City Hall, Bishan, and Harbourfront were all decked out in blue banners printed with the company’s slogan, ‘fortune favours the brave’.
Coinbase had invested in physical advertising too, with billboards inviting people to earn free crypto through an educational course.
Around the city, there were eight crypto ATMs — mostly operated by Daenerys & Co — which allowed users to easily buy cryptocurrencies like Bitcoin for a minimal fee.
Then, as January came around, all of this disappeared. The Monetary Authority of Singapore (MAS) released a new set of guidelines prohibiting crypto companies from advertising to the general public. This meant no more billboards, social media ads, or ATMs.
At the time, Chia Hock Lai, co-chairman of Blockchain Association Singapore (BAS) told Channel News Asia that “it would have been better if the industry was consulted.”
Consulting the industry
In the following months, it became apparent that the initial set of guidelines lacked clarity. By April, BAS and MAS had worked together to refine the framework going forward.
BAS announced that advertising to institutional investors was allowed if crypto companies could demonstrate that no other groups were being targeted.
Companies would also be allowed to sponsor international events which were broadcasted in Singapore (but held elsewhere), as well as local industry events limited to professionals in the field..
The core idea still remained the same: no advertising of crypto services to retail consumers. However, BAS informed the Business Times of its hope that companies would be given some leeway to engage in ‘responsible advertising’.
When is crypto advertising responsible?
In June, UFC 275 — a mixed martial arts event — was held at the Singapore Indoor Stadium. The venue was almost sold-out, with over 10,000 in attendance.
As per the UFC’s sponsorship agreement with Crypto.com, the participating fighters all walked out in tees featuring the crypto exchange’s logo.
An event hosted in Singapore and targeted at retail consumers, yet in this case, the presence of a crypto sponsor wasn’t an issue.
Once Formula 1 (F1) returns to Singapore in 2021, this might happen again at a much larger scale. Eight out of the 10 F1 teams are sponsored by crypto companies, including exchanges such as Bybit, Binance, Crypto.com, and FTX.
When the event last took place in the country, there were over 250,000 people in attendance.
It stands to reason whether this advertising is considered ‘responsible’ or if there’s simply no way around it. F1 generates significant economic benefits for Singapore and just this year, the contract to host the event here was renewed till 2028.
At a roundtable discussion this month — featuring digital asset firm Fireblocks, crypto exchange Coinhako, and the MAS — Fireblocks’ Sagar Sarbhai commented on such events saying, “We, as industry players have a role to play here. In all these events, it’s our responsibility to educate the retail consumers and the industry at large about the positive use-cases of [blockchain technology] rather than the speculative uses.”
Are TradFi companies exempted?
Apart from event sponsorships, retail consumers are also being exposed to crypto investments through TradFi apps.
Trading platforms such as Saxo and Plus500 have started offering exchange traded products (ETPs) and contract for differences (CFDs) using crypto as the underlying asset.
Alongside regular equity and foreign exchange offerings, investors can trade in pairings such as Bitcoin/USD and Ethereum/USD.
Although buying these instruments doesn’t give holders ownership of the underlying cryptocurrency, it does expose them to an equal or even greater amount of risk.
Unlike buying cryptocurrency — which can have utilities today such as purchasing NFTs or participating in blockchain games — CFDs are purely speculative in nature. They incentivise users to trade based on price movements rather than the actual utility of the assets.
Companies offering these products are still free to advertise their trading services to a Singaporean audience. In fact, searching for crypto-related terms on Google often features a Saxo ad as the top result.
These ads don’t explicitly highlight crypto offerings, however upon clicking on the website, users would quickly be able to discover them.
By listing crypto-based instruments alongside TradFi offerings, such platforms — most of which have apps targeted towards retail investors — are directly reaching an audience which the MAS seeks to protect with its advertising guidelines.
Is the crypto advertising ban effective?
An imperfect solution is better than no solution at all. That being said, it can be argued that the crypto advertising guidelines are doing more harm than good.
For one, crypto companies look to be at a disadvantage as compared to their TradFi counterparts.
As per Coincub’s global crypto-friendliness rankings, Singapore lost its top spot to Germany this year. This was due to the advertising restrictions and removal of crypto ATMs.
Companies based in Singapore also began exploring other countries to operate from. For example, Bybit relocated its headquarters to Dubai.
As a country which has long been in support of blockchain development, a blanket ban on retail advertising seems detrimental. If the aim was to prevent speculative investing, targeted measures might have proven more effective.
Singapore’s retail consumers will continue to find out about crypto — whether it’s through social media or broadcasts. Later this year, the FIFA World Cup — sponsored by Crypto.com — will be shown across sports bars and community centres, potentially reaching over a million Singaporeans.
Rather than halting the narrative, perhaps it would’ve been more effective to guide it in a positive direction. Crypto companies could play an integral role in highlighting the risks of speculative investing, and instead educating consumers on the actual utilities of blockchain technology.
As it stands, they don’t have much incentive to do so.