Singapore’s Central Bank Will Now Treat Certain ICOs as Securities

In a recent report, the Monetary Authority of Singapore outlines when it will consider an ICO as a security instrument.

In a recent guideline, published on 14th November, Singapore’s financial regulator put forth its interest in the booming ICO market and will now impose securities laws on certain ICOs.

The guidelines stated that the Monetary Authority of Singapore (MAS) will consider certain ICOs as securities based on the nature of the businesses they are backing. The regulatory body will only consider those tokens which comply with capital market products under SFA guidelines.

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In a statement, MAS said: “Offers or issues of digital tokens may be regulated by MAS if the digital tokens are capital markets products under the SFA. Capital markets products include any securities, futures contracts and contracts or arrangements for purposes of leveraged foreign exchange trading.”

The report also includes several case studies to clear the cloud of confusion about which ICOs will be treated as securities and which are not.

The report also states that Singapore laws which do not come directly under the regulatory body’s jurisdiction may also apply to the ICOs.

The report states: “Digital tokens that perform functions which may not be within MAS’ regulatory purview may nonetheless be subject to other legislation for combating money laundering and terrorism financing.”

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To address the tension of the involvement of digital currencies in money laundering and terror funding, MAS, in the report, stated that it would develop a new payment service framework to cover companies’ involvement in the exchange dealings of virtual currencies with fiat currencies or even other digital currencies.

The blockchain firms in Singapore can now also apply for a regulatory sandbox. But only firms which are developing technologies to improve the capital market will be considered.

On the sidelines of Singapore’s FinTech Festival, Sopnendu Mohanty, MAS Chief Financial Officer, said: “If we get some use case which we have not seen, then they could come to a regulatory sandbox.”

“There’s a bunch of ICOs which are selling the Taj Mahal, selling residences on Mars,” Mohanty said. “Be careful of these.”

Mohanty added: “The coin offerings which we believe we should support, is when the ICO is doing something technologically different to make the existing capital markets efficient.”

But he also mentioned that until now, MAS has not seen any example of such ICOs.

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