The Monetary Authority of Singapore (MAS), the city-state’s central bank and financial regulator, has warned eight cryptocurrency exchanges in Singapore not to allow trading in digital tokens that are securities or futures contracts without the regulator’s permission, it said on Thursday.
“MAS has reminded the eight digital token exchanges to seek MAS’ authorization if the digital tokens traded on their platforms constitute securities or futures contracts under the Securities and Futures Act (SFA),” MAS said.
“If the digital tokens constitute securities or futures contracts, the exchanges must immediately cease the trading of such digital tokens until they have been authorized as an approved exchange or recognized market operator by MAS.”
MAS has also requested the interruption of an initial coin offering (ICO), stating that the token issuer had been distributing tokens representing equity ownership in a company. This offer was made without a MAS-registered prospectus, which is a Securities and Futures Act (SFA) requirements.
MAS said the issuer has ceased the offer and has token remedial actions to comply with MAS’ regulations. It has also returned all funds received from Singapore-based investors.
Lee Boon Ngiap, assistant managing director of capital markets at MAS, reminded that while there was no specific regulation for activities involving cryptocurrencies, token issuers and exchange operators that conduct activities involving tokens representing equity ownership must comply with relevant regulations.
“The number of digital token exchanges and digital token offerings in Singapore has been increasing. We do not see a need to restrict them if they are bona fide businesses. But if any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action,” Ngiap said.
MAS released clarification on ICOs in August 2017 followed a few months later by a ICO guidance explaining when a digital token is considered a security.
Singapore has emerged as a hotbed for ICOs and has become a preferred location for many cryptocurrency startups and entrepreneurs in the region to conduct their token sale. By late-2017, ICOs in Singapore had raisedUS$260 million, the third country by volume behind the US with over US$1 billion and Russia with US$310 million, according to a report by EY.