Several regulators around the globe have taken a hostile approach around crypto exchanges and crypto-related companies by forbidding them to advertise the industry to the general public. However, Binance’s CEO Changpeng Zhao thinks this will not affect the high demand of the market.
Curbing Crypto Ads
Crypto-related firms have been accused by international regulators of marketing their services with misleading messages that undermine the risk digital assets investments could possess to users.
Spain, U.k., and Singapore have banned the advertisement of crypto to different extents.
In Singapore alone, crypto exchanges and other licensed companies can only publish ads on their own websites and mobile apps to avoid reaching the general public.
The country’s ban includes “any form of advertisements or promotional materials in public areas such as Singapore public transport, public transport venues, broadcast media or periodical publications, third party websites, social media platforms, public events or roadshows.”
“MAS stresses that DPT service providers should conduct themselves with the understanding that trading of DPTs is not suitable for the general public. These Guidelines set out MAS’ expectation that DPT service providers should not promote their DPT services to the general public in Singapore.“
Spain requires a pre-approval for any crypto advertisement directed towards an audience of 100,000 or more people and all ads and must include a warning like such: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost.”
In the U.K., authorities have banned several ads that they have claimed to be “irresponsible and took advantage of consumers’ inexperience or credulity.”
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Why It Won’t Affect Price
The price of cryptocurrencies is driven by demand and supply, meaning the interest users have in the market and the availability of each digital coin. For this reason, the effects that bans might have on the adoption of cryptocurrencies are believed to be important for the future of the market.
Binance CEO Changpeng Zhao (also known as “CZ”) alleged during a CNBC International interview that the reason why regulators take this approach on advertisements is that the crypto industry has a huge demand.
Even though the CEO thinks these bans could slow down the industry’s growth, CZ is not worried about the macro picture because he thinks the demand for crypto is so high that curbing crypto ads will have little impact.
Changpeng Zhao claimed that most users are driven to the crypto industry through “word of mouth” marketing rather than ads.
“Clampdown on crypto advertising is unlikely to have much of an effect on demand, as most of the crypto users come from word-of-mouth promotions anyway.”
CZ noted that Facebook and Google opposed crypto ads for a long time and even though they are giant platforms that reign over the internet, this has not affected the adoption of digital assets.
Binance is the largest crypto exchange in the world and it recently withdrew its application to start a cryptocurrency exchange in Singapore after facing pressure from the country’s regulators over concerns of risks and consumer protection.
The exchange, however, has not lost interest in conducting business in the country. The global regulatory framework is miles away from becoming clear, and Binance is working to adapt and comply, taking “strategic, commercial and developmental” considerations.
CZ stated that Binance hasn’t driven its eyes away from Singapore for the country might change its regulatory framework later on.
The future location of Binance headquarters remains a mystery. CZ said they are exploring “everywhere in the world.”
The CEO noted that Binance is working with many authorities to help them build a comprehensive regulatory framework for the crypto market.
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Crypto Total Market Cap
At the time of writing, the global market cap of cryptocurrencies sets its price at $1,8 trillion, showing a decline of %3 in the daily chart.
Crypto total market cap at $1,8 trillion in the daily chart | Source: TradingView.com