MAS blocks securities token offering over regulatory breach

The issuer intended to rely on an SFA exemption to offer securities without registering a prospectus with MAS.

The Monetary Authority of Singapore (MAS) warned an initial coin offering (ICO) issuer not to proceed with its securities token offering in Singapore until it can fully comply with regulatory requirements under the Securities and Futures Act (SFA), an announcement revealed.

The issuer had intended to rely on an exemption under the SFA which would have allowed them to make a securities offering to accredited investors without registering a prospectus with MAS. The agency however pointed out that this exemption from prospectus registration is subject to certain conditions, which the issuer did not meet.

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“The issuer in this case failed to comply with the advertising restriction when its legal advisors put out a LinkedIn post accessible to the public calling attention to the offer,” MAS explained. “As such, the issuer would not be able to rely on the exemption from prospectus registration.”

Following the warning, the issuer has suspended its global offering of securities tokens, the statement revealed.

Also read: MAS slaps warning on ICO issuer and 8 digital token platforms

The agency is reminding all digital token issuers that offer securities tokens to comply with all applicable securities laws including the registration of a prospectus with MAS.

“Where an offer is made to the public, a prospectus is required to ensure that investors are provided with all the information to make informed investment decisions,” MAS’s assistant managing director for capital markets Lee Boon Ngiap highlighted. “MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA.”