MAS slaps warning on ICO issuer and 8 digital token platforms

They violated MAS' regulations on registration.

The Monetary Authority of Singapore (MAS) warned eight digital token exchanges to stop trading digital tokens that are securities or future contracts without the agency’s authorisation. MAS also directed an Initial Coin Offering (ICO) issuer to stop offering digital tokens to Singapore-based investors.

The agency cautioned the digital token exchanges to get authorisation should the digital tokens traded on their platforms constitute securities or futures contracts under the Securities and Futures Act (SFA).

“Digital token exchanges commonly allow the buying and selling of digital tokens using fiat currency, and also facilitate the exchange of digital tokens between their clients,” MAS explained.

“If the digital tokens constitute securities or futures contracts, the exchanges must immediately cease the trading of such digital tokens until they have been authorised as an approved exchange or recognised market operator by MAS,” MAS said. 

MAS assessed that the ICO issuer had contravened the SFA as its tokens represented equity ownership in a company and therefore would be considered as securities. According to the agency, the ICO issuer’s offer was made without a MAS-registered prospectus, which is an SFA requirement.

The issuer has then ceased the offer and has taken remedial actions to comply with MAS’ regulations. It has also returned all funds received from Singapore-based investors.

The number of digital token exchanges and digital token offerings in Singapore has been increasing, according to MAS capital markets assistant managing director Lee Bon Ngiap.

“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,” he added.

Lee also warned the public that there is no regulatory safeguard if they choose to trade on unregulated digital token exchanges or invest in digital tokens that fall outside the remit of MAS’ rules.