Crypto Advertising Just One Area of Focus for Regulators

Regulators have been back in action this week, with crypto exchanges once more a key area of focus.

As exchanges look to ramp up marketing campaigns to lure investors, regulators have been looking to stem the tide. A number of exchanges have been particularly active in ramping up marketing campaigns, drawing the attention of regulators.

Crypto Exchanges and Crypto Ad Clampdown

In the 1^st week of the year, news had hit the wires of the UK’s Advertising Standards Authority (ASA) banning two Crypto.com (CRO) ads.

The Singapore government also hit crypto exchanges with a ban on advertising. According to news at the start of the week, Singapore’s MAS imposed a blanket ban on digital payment token providers (DPTs) from marketing their services in public areas. In Singapore, public areas include social media platforms and print media as well as on public transport and transportation venues.

Following Singapore’s ban, the UK government announced plans to crackdown on “misleading” crypto ads. The latest move is reportedly to align crypto exchange advertising with the advertising requirements for mutual funds and other financial products.

Following Singapore’s ban and the UK government’s announcement, news hit the wires of Spain’s CNMV rolling out new crypto ad rules, reportedly effective on 17^th February.

For both the UK and Spain, requiring strict rules in the advertising of riskier assets is aligned with the advertising of other financial products. This is unlikely to be considered punitive and should be seen as a natural progression for the crypto markets. Advertising laws for mutual funds and other financial products have continued to evolve over the years.

For the crypto markets, however, the greater concern will likely be over the marked increase in regulatory activity.

Ad Clampdown Coincides with Calls for a Global Regulatory Framework

Late last year, the Bank of England had called for a global economic framework to address risks to financial stability. Earlier this year, the IMF echoed the Bank of England’s calls, talking of interconnectedness between the crypto and U.S equity markets.

At the start of the week, we also reported on news from DAVOS 2022. India’s prime minister Modi called for “global cooperation and a common approach towards addressing emerging challenges posed by cryptocurrencies”.

The latest clamp down and focus on advertising campaigns is likely stemming from calls by regulators to protect investors.

For crypto exchanges and the crypto markets, there will also be a likely increase in uncertainty to test support for the crypto majors.

Bitcoin (BTC) Price Action

At the time of writing, Bitcoin (BTC) was up by 0.15% to $42,435. Market reaction to the latest spate of regulatory activity has been relatively muted on Bitcoin. For the current week, Bitcoin is down by just 1.69%. Year-to-date, however, Bitcoin is down 8.28%, with crypto market sentiment towards FED monetary policy and regulatory activity weighing.

The losses are modest, however, when compared with the slump of 2018. Tomorrow’s US Congress subcommittee hearing on cryptos may have a greater impact, however…