Singapore crypto industry given some clarity over ad guidelines

Singapore's crypto industry associations are working on a code of practice for self-regulation. PHOTO: REUTERS

SINGAPORE (THE BUSINESS TIMES)- Singapore's crypto fraternity has smoothened out some "rough edges" with the Monetary Authority of Singapore (MAS) with regard to advertising curbs that were announced earlier this year and are working on a code of practice for self-regulation.

As a rule of thumb, MAS' guidelines will not allow marketing and advertising of digital payment token (DPT) services to retail consumers in Singapore, but ads to accredited and institutional investors are allowed if service providers can demonstrate how they are targeted only at these specific groups of investors, representatives of the Blockchain Association Singapore (BAS) told members on Thursday (April 7) in an in-person briefing.

BAS' briefing follows a two-hour meeting, together with industry peers from the Association of Cryptocurrency and Blockchain Enterprises and Start-ups Singapore (Access) and Singapore FinTech Association (SFA), with MAS officials on March 30 to clarify and provide feedback on the guidelines.

Sponsorship of international events not held in Singapore but which will be broadcasted here are not in breach of the guidelines and can be allowed, BAS told its members on Thursday.

The briefing was led by Ms Chua Peiying, a partner at Linklaters, Mr Nizam Ismail, chief executive of crypto consultancy Ethikom, and Azman Hamid, chief compliance officer at Upbit Singapore.

DPT service providers can sponsor, participate and host financial services or industry events, if audiences at such events are limited to industry players and professionals and do not include the retail public. Business-to-business advertising, as well as corporate announcements and media releases which do not promote trading and investing in DPT services, are also allowed.

Several outstanding issues remain, including how industry players can ensure that their corporate or brand advertising activities do not trivialise the risks of crypto trading. MAS has also flagged concerns over whether some may disguise "training events" to push for and sell crypto services to retail consumers, the BAS representatives said.

BAS, Access and SFA have formed a task force to draft a code of practice to address these issues, as suggested by MAS. The code needs to "set a high bar" in order for MAS to endorse it, the BAS representatives said. As a reference, they cited the code of conduct in place for Singapore's private banking industry, launched in 2011 by the Private Banking Advisory Group.

While acknowledging the regulator's openness in engaging with the industry, some BAS members still view the guidelines against public advertising as an "overreach". "It's a very blunt instrument… Obviously, there are other riskier products out there, and they don't suffer fate as DPTs," Mr Nizam said at the Thursday briefing.

BAS co-chairman Chia Hock Lai told The Business Times that BAS hopes industry players can be given some latitude to engage in "responsible advertising".

What constitutes responsible or appropriate advertisements can be assessed by independent third parties, Mr Chia said. Spanish regulators have taken a more palatable approach, he said, noting how Spain's National Securities Market Commission reviews and pre-approves certain crypto campaigns before they can be executed.

Earlier this year, The Business Times reported the industry's concerns over the lack of clarity and mixed messaging from MAS' guidelines against crypto ads. The guidelines are aimed at discouraging retail participation in the volatile business of crypto trading, but some members were concerned that they will make it more difficult for crypto and blockchain tech firms to set up shop here.

BAS also said that MAS is open to reviewing the guidelines "in due course as the industry evolves". The regulator is also seeking quantifiable data on how the guidelines may affect industry players.

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