Singapore's Central Bank Outlines When ICOs Are and Aren't Securities

Singapore Central Bank issued guide to digital token offerings providing general guidance on the application of securities laws administered by MAS.

AccessTimeIconNov 15, 2017 at 5:00 a.m. UTC
Updated Sep 13, 2021 at 7:09 a.m. UTC

Singapore's de facto central bank has published new guidelines on initial coin offerings (ICOs), outlining how token sales would be viewed under its securities laws.

According to a Nov. 14 statement from the Monetary Authority of Singapore (MAS), tokens sold through the blockchain funding model may be considered securities under certain circumstances, citing Singapore's Securities and Futures Act (SFA) as well as the Financial Advisers Act.

The 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 new report includes several case studies, including one detailing a token tied to a computing power-sharing platform (which wouldn't count as a security) and another that is focused on a token connected to a startup investment fund (which would count as a security).

The guidelines also shore up earlier statements from the MAS. In August, officials stated that some token sales would be subject to securities laws on the basis that the cryptographic data sold would constitute kinds of debentures or stakes in collective investment schemes.

Further, the MAS said in its new guidelines that other Singapore laws may apply to token sales, including the ones that don't ultimately come under its direct jurisdiction.

"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," the report states.

In the area of money laundering and terrorism financing in particular, the MAS said that it would move to develop a new payments service framework that would cover companies involved in "the dealing or exchange of virtual currencies for fiat or other virtual currencies."

"Such intermediaries will be required to put in place policies, procedures and controls to address such risks. These will include requirements to conduct customer due diligence, monitor transactions, perform screening, report suspicious transactions and keep adequate records," the MAS wrote.

The full MAS guidelines can be found below:

Singapore image via Shutterstock


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