In recent years, Singapore has been a leading centre for blockchain and cryptocurrency technology. But at the same time, The Monetary Authority of Singapore has been aggressively regulating the cryptocurrency industry.
As trading in such assets is “highly risky and not suitable for the general public,” the Monetary Authority of Singapore published a set of guidelines on Monday ordering cryptocurrency businesses to stop promoting or advertising their products to retail investors in public places, both physical and virtual.
The recommendations are not enforceable by law, but the statement comes after the government previously let down a number of companies by taking a slow pace to approve platforms that wanted to establish offices in Singapore.
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Singapore’s Changing Attitude Towards the Crypto Industry
As more crypto businesses seek clarity from authorities about guidance, Anton Ruddenklau, global fintech leader and head of financial services advisory at KPMG Singapore says, “Cryptocurrencies and blockchain are projected to be extremely hot areas of investment in 2022.”
This statement is noteworthy in light of previous MAS declarations and actions, which confirmed in January that service providers of digital payment tokens should not advertise their offerings to the general public.
According to the minister in charge of the MAS “Non-fungible tokens (NFTs) are investments that are not suitable for retail investors”. MAS had no plans to regulate them. However, if such tokens were structured to represent rights to a portfolio of listed shares, they will be subjected to the prospectus, licencing, and business conduct requirements.
Digital payment token services are now offered by 63 businesses. They carry out this business without a licence as mandatory under the Payment Services Act. According to the MAS website, 109 businesses that had previously received an exemption are no longer exempt.
In December, Binance said that its Singaporean business has withdrawn its application for a licence. As Singapore serves as one of the key hubs for technology, research, and development the company plans to increase its investments in the region. According to a business official, the exchange has transformed its Asia services operations in Singapore into a hub for blockchain innovation.
In January, it became illegal for cryptocurrency service providers to promote their goods in open areas like public transportation. Public websites, print, radio, and social media were all subject to this restriction.
The MAS is increasing its ability to control cryptocurrency businesses. The regulator announced new guidelines in April requiring firms to apply for licences and adhere to anti-money laundering (AML) and combat the funding of terrorism legislation in order to provide services outside of the country. Singapore is going to look at the public chain tokenization of digital assets.
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Numerous cryptocurrency businesses were formed in Singapore as a result of its low taxes and reputation as one of the most crypto-friendly city-states. A CBDC Center of Excellence (COE) was unveiled by the Mojaloop Foundation, a provider of payment solutions, on Tuesday in Singapore. Mohanty advises the board, and MAS participates in the COE Working Group. A state-backed alternative cryptocurrency might be published three years after the COE is introduced, according to Mohanty.
Guidelines to be Followed by the Crypto Investors and Service Providers
The recommendations are not enforceable by law, but the statement comes after the government previously let down a number of companies by taking so long to approve platforms that wanted to open offices in Singapore.
With immediate effect, Bitcoin businesses shall refrain from contacting potential clients through advertisements on social networking sites or other public websites, at bus and train stops or other public places, or in broadcast or print media. They are discouraged from offering actual ATMs for the purpose of issuing cryptocurrency tokens.
Additionally, these suppliers of digital asset services should refrain from using outsiders to advertise their cryptocurrency-based services to Singaporeans, such as social media influencers. On their own business websites, mobile applications, or official social media profiles, they may still promote or advertise.
The financial regulator is likely to take note of digital asset companies that disregard the public safeguards, which may have an impact on whether they are allowed to continue operating legally in Singapore, even though there is no specific penalty should crypto service providers fail to follow the guidelines.
Despite the fact that the marketing framework went into effect on January 17, DPT participants are granted some wiggle room to end any promotional activities that are in violation of the rules, for instance, if certain contractual commitments must be met.
The central bank of Singapore is adopting a similar position to that of the UK, where the advertising watchdog has taken action to crack down on “misleading” marketing by cryptocurrency companies. The city-rules state’s also come as officials from several countries increase their scrutiny of the developing cryptocurrency industry, which is notorious for operating internationally and without regulatory control.
Nations are Increasing Regulations Over the Crypto sector
According to Jack Tao, CEO of Phemex, it is not surprising that financial regulators may object to possible dangers for ordinary cryptocurrency investors given the speculative swings of cryptocurrencies. “It is possible that nations all over the world will start to create stronger regulations on how to control it as the crypto market grows more mature and observes greater acceptance,” he claims.
“In a sense, this new legislation raises entrance obstacles, but we can be sure that Singapore is still a nation that has approached the crypto industry with a pretty open mind“. Singapore’s move to implement legislation provides encouraging indicators for crypto acceptance in the future, despite nations like India and China implementing stringent restrictions.
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Igneus Terrenus, the head of advocacy and policy at Bybit, concurs that Singapore continues to be one of the most well-liked hubs for the establishment of cryptocurrency-related firms. He also notes that the rules forbidding crypto trading service providers from publicising or advertising their offerings appear to be restraining the development of the sector on the island city-state.
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