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Last year, Crypto.com took control of Singapore’s MRT stations. City Hall, Bishan and Harbourfront were all adorned with blue banners printed with the company’s slogan, “fortune smiles on the brave”.

Coinbase had also invested in physical advertising, with billboards inviting people to earn free crypto through an educational course.

Around town, there were eight crypto ATMs — mostly operated by Daenerys & Co — that allowed users to easily purchase cryptocurrencies like Bitcoin for minimal cost.

Then, as January approached, all of that disappeared. The Monetary Authority of Singapore (MAS) has released a new set of guidelines prohibiting crypto companies from advertising to the general public. That meant no more billboards, social media ads, or ATMs.

At the time, Chia Hock Lai, co-chair of the Blockchain Association Singapore (BAS), told Channel News Asia that “it would have been better if the industry had been consulted.”

Industry Consulting

Over 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 permitted if crypto companies could demonstrate that no other groups were being targeted.

Companies would also be allowed to sponsor international events broadcast in Singapore (but held elsewhere), as well as local industry events limited to professionals in the field.

The basic idea has always remained the same: no advertising of crypto services to retail consumers. However, BAS told the Business Times that it hoped companies would have 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 hall was almost full, with more than 10,000 people present.

Per the UFC‘s sponsorship deal with Crypto.com, participating fighters all walked out wearing tees emblazoned with the crypto exchange’s logo.

An event held in Singapore and aimed at retail consumers, but in this case the presence of a crypto sponsor was not an issue.

Once Formula 1 (F1) returns to Singapore in 2021, it could happen again on a much larger scale. Eight of the 10 F1 teams are sponsored by crypto companies, including exchanges such as Bybit, Binance, Crypto.com and FTX.

When the event was last held in the country, there were over 250,000 people in attendance.

It stands to reason that this ad is considered “responsible” or there is simply no way around it. F1 generates significant economic benefits for Singapore and this year alone the contract to host the event here has been renewed until 2028.

During a panel discussion this month – featuring digital asset firm Fireblocks, crypto exchange Coinhako and MAS – Sagar Sarbhai of Fireblocks commented on these events saying, “We, as industry players, have a role to play here. In all of these events, it is our responsibility to educate retail consumers and the industry as a whole about the positive use cases of [blockchain technology] rather than speculative uses.

Are TradFi companies exempt?

Apart from event sponsorships, retail consumers are also exposed to crypto investments through TradFi apps.

Trading platforms such as Saxo and Plus500 have started offering exchange-traded products (ETPs) and contracts for differences (CFDs) using crypto as the underlying asset.

Along with regular stock and currency offerings, investors can trade pairs such as Bitcoin/USD and Ethereum/USD.

While buying these instruments does not give holders ownership of the underlying cryptocurrency, it exposes them to equal or even greater risk.

Unlike buying cryptocurrency – which can have uses today such as buying NFTs or participating in blockchain games – CFDs are purely speculative in nature. They encourage users to trade based on price movements rather than the actual usefulness of assets.

Companies offering these products are always free to advertise their business services to a Singaporean audience. In fact, searching for crypto-related terms on Google often brings up a Saxo ad as the first result.

These advertisements do not explicitly highlight crypto offers, but clicking through the website, users could quickly discover them.

By listing crypto-based instruments alongside TradFi offerings, these platforms — most of which have applications aimed at retail investors — directly reach an audience that the MAS seeks to protect with its advertising guidelines.

Is the ban on crypto advertising effective?

An imperfect solution is better than no solution at all. That being said, it’s safe to say that the crypto advertising guidelines do more harm than good.

On the one hand, crypto companies seem to be at a disadvantage compared to their TradFi counterparts.

According to Coincub’s Global Crypto-Friendliness Ranking, Singapore has lost its top spot to Germany this year. This was due to advertising restrictions and the removal of crypto ATMs.

Singapore-based companies have also started exploring other countries from which to operate. For example, Bybit moved its headquarters to Dubai.

As a country that has long supported blockchain development, a blanket ban on retail advertising seems harmful. If the objective was to prevent speculative investments, targeted measures might have been more effective.

Retail consumers in Singapore will continue to learn about crypto, whether through social media or broadcasts. Later this year, the FIFA World Cup – sponsored by Crypto.com – will be broadcast to sports bars and community centers, potentially reaching over a million Singaporeans.

Rather than stopping the narrative, it might have been more effective to steer it in a positive direction. Crypto companies could play a vital role in highlighting the risks of speculative investing and instead educating consumers about the real uses of blockchain technology.

As it stands, they don’t have much incentive to do so.

Featured image credit: CNN