These crypto platforms cannot advertise or market their services in public areas, such as through advertisements on public transport, public transport venues and public websites, or the engagement of third parties such as social-media influencers.
The new regulations are a significant blow to crypto platforms as it is a tumultuous and uncertain time in the industry, even as blockchain and crypto-related investments in Singapore surged to $1.48 billion in 2021, according to KPMG's Pulse of Fintech report. These investments are 10 times the previous year and nearly half the Asia Pacific total for 2021.
Caroline Malcolm, head of international policy at Chainalysis, a blockchain data platform, says this move is aligned with MAS' long-held position towards the sector, which encourages the development of blockchain technology and the use of crypto in value-adding use cases. However, MAS has always discouraged retail trading of crypto due to the perceived risky nature of such markets.
While MAS subsequently provided the industry with clarifications on some areas of the guidelines, Malcolm points out several outstanding issues remain and notes industry bodies have formed a task force to draft a code of practice to address these unique issues.
"The broader impact is with optics and messaging as such guidelines could be perceived as a message that Singapore is cracking down on the sector, making it a less attractive destination for financial innovation," she explains to Campaign Asia-Pacific.
"Any negative policy statements or regulatory developments could have the unintended consequence of making Singapore a less attractive destination for such investments. Moreover, current market conditions and volatility could also exacerbate the situation."
Singapore's regulatory approach to crypto advertising is not unique on the global stage. Other jurisdictions have also clearly committed to supporting financial innovation and have taken a different approach to achieve consumer protection.
For example, in the UK and Spain, regulators require crypto promotions to abide by the principles of clarity and fairness while featuring risk disclosures. In India, the Advertising Standards Council of India (ASCI) has provided the industry with advertising guidelines to safeguard consumer interest and to ensure that advertisements do not mislead consumers.
In Thailand, the Securities and Exchange Commission (SEC) has consulted extensively with stakeholders on draft regulations, and final rules can be expected in due course.
Response from crypto platforms in Singapore
Singapore's crypto ad restrictions have forced crypto companies to re-evaluate their marketing strategies, particularly for user acquisition. Ad dollars are also moving away from media deals toward more purpose-based advertising strategies and a more significant focus on improving the underlying product.
Antoine Gross, general manager for Southeast Asia at Impact.com, notes there has been a slowdown in advertising spending by brands as they try to navigate the restrictions. However, crypto companies still need to acquire new users and capture a higher market share.
"While we see some companies going big on global branding activations, most marketing teams are currently more focused on securing ROI and driving performance across their marketing activities," he tells Campaign Asia-Pacific.
"However, for Singapore-specific campaigns, the approach requires some adaptation, with a greater need to create partnerships where the outcome is quality educational content that's time-relevant and informative for the retail investor community. This requires crypto companies to step up their owned content rollout."
At Eqonex, a crypto exchange, its head of marketing Gillian De Brondeau says it has had to shift its advertising away from traditional approaches toward delivering educational content because factual, educational and informative content is still permitted within their framework.
"You need to be where your audience is, so working with partners and publishers can be an effective way to reach new customers," De Brondeau tells Campaign Asia-Pacific.
Rajan Batra, head of media sales at financial portal MoneySmart Group, says he has seen most crypto brands in Singapore shift their focus on their assets like websites, blogs and social media to promote their products and services.
"We have seen many brands also using industry events targeting the cryptocurrency or finance community to drive their brand awareness," he adds.
For example, crypto platform Luno is partnering with MoneySmart to create a 'Crypto Starter Kit' to help beginners in the crypto space improve their financial literacy in cryptocurrency in an engaging and visual way.
This starter kit includes bite-sized, no-jargon explanations of basic concepts such as blockchain technology and bitcoin to slightly-advanced but essential topics such as non-fungible tokens (NFTs) and decentralised finance (DeFi).
Using personality quizzes, Luno has also integrated an interactive quiz to help customers understand themselves and gauge their level of understanding of crypto. Over the next few months, the microsite will continue to engage with audiences through educational articles, videos, and social media content to encourage strengthening financial literacy.
MoneySmart will also be rolling out newsletters and social activities to amplify Luno's education efforts to the masses.
Wang Ying Jie, country marketing and business development manager for Singapore at Luno, notes that Singapore is one of Luno's key markets and claims it has witnessed more than 59% year-on-year growth in its customer base in June 2022.
She adds that Luno wants to help investors learn and grow their crypto knowledge to make informed decisions that fit their investment strategy.
"We also want to help new and current investors to be equipped with a solid financial literacy foundation. That is why we also have Luno Discover, a one-stop education hub that offers guides to crypto, news and industry insights for interested investors to evaluate the long-term potential of this asset class and effectively manage risk," Wang explains to Campaign Asia-Pacific.
Dr Julian Hosp, chief executive officer and co-founder at Cake DeFi, points out that Binance, the largest crypto exchange by trading volumes, has signed on TikTok star Khaby Lame as a global brand ambassador to increase Web3 understanding and awareness.
"We are also pursuing more strategic marketing partnerships that prioritise customer acquisitions over mass brand awareness," he says.
For example, the company recently announced two esports and gaming partnerships which were born from the natural affinity between gamers and crypto enthusiasts. The first was a year-long partnership with gaming platforms, Faceit. The recent one was with Razer Silver, a loyalty rewards programme backed by Razer.
The road ahead for crypto platforms
The crypto ads guidelines in Singapore may signal that the MAS is heading towards the next phase of cryptocurrency regulation as adoption increases globally.
That means responsible advertising will be paramount for the safe exposure of retail customers to the crypto industry, especially as the asset class is in its infancy and thus, experiences high volatility.
"It will be key to ensure regulatory clarity with local regulators to provide an environment that safeguards the interest of our customers and does not stifle growth in the cryptocurrency industry," says Wang.
De Brondeau predicts there will be more regulations in the future. Still, as the industry matures and the users become more informed, regulators might evolve their approach to mirror the rules around marketing traditional financial products and services.
"Crypto, like any other financial industry, comes with risk, but we work closely with regulators from the world's largest financial markets to provide a platform that protects our clients," he adds. "We want to help create a sustainable digital asset industry that offers the same levels of transparency and checks and balances of traditional finance."