The Monetary Authority of Singapore has shut down an ICO and issued a warning to eight digital token exchanges about possible securities law violations.
On May 24, 2018, the Monetary Authority of Singapore (MAS) demanded an unidentified ICO cease selling tokens in Singapore, as it determined the offering was in violation of the country's Securities and Futures Act (SFA).[1]
MAS took the additional step of warning eight Singapore-based 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."
The eight exchanges were not identified in the MAS announcement.
On its website, MAS determined the issuer of the ICO "had contravened the SFA as its tokens represented equity ownership in a company and therefore would be considered as securities under the SFA."[2]
However, "virtual currencies in Singapore are not regulated by MAS as they are not considered securities or legal tender," according to a government website.[3]
Additionally, the ICO fell afoul of the SFA by failing to register a prospectus with the MAS.
This order and warning followed Tuesday's release of a government paper proposing updates to Singapore's current regulatory scheme, which the paper's authors explain is from 2002, and is not equipped to address recent market developments:[4]
"MAS has observed the emergence of new business models in trading platforms, including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries."
Currently, authorized trading platforms in Singapore must fall into one of two categories: either "approved exchange" or "recognized market operator." The paper proposes splitting the "recognized market operator" designation into three separate tiers, creating a new category
