Singapore to Regulate Securities-Like ICOs

The Monetary Authority of Singapore (MAS) recently published a paper on ICOs and among other things, it looks like some token sales are going to be regulated.

According to the paper (PDF), all ICOs with tokens that fall under capital markets products definitions will automatically be subject to the Securities and Futures Act (SFA), just like every equity or debt instrument in the Lion City.

As such, issuers with tokens that resemble security holdings would need to act like they’re doing an IPO from here on out. Meaning, issuers will not only need to publish a SFA-compliant prospectus, they’ll need to register it with the central bank as well.

Offerings below SGD5 million will be exempt from this however, and so will private placements, institutional investor-only sales, and offers to accredited investors. MAS does point out that other rules may apply to these cases though, so one might want to think twice before advertising their hot new ICO.

All that said, Singapore recently signaled a renewed interest in hosted token sales. Speaking to the Financial Times, Ravi Menon, managing director of the Monetary Authority of Singapore, said that while some ICOs “look very much like a scam,” the central bank is “quite happy” to test some in its sandbox to promote technology and that it’s “very keen to find an ICO that focuses on the technology of the blockchain.”

MAS, he says, doesn’t plan on banning ICOs anytime soon.

“We don’t ban Dutch tulips but they are around, so the best you can do is tell consumers beware,” he said, referring to the notorious 17th century trading bubble in the Netherlands.

Photo: Jimmy McIntyre