Monetary Authority of Singapore Publishes Guidance on Initial Coin Offerings

The Monetary Authority of Singapore (MAS) has published a document providing guidance on Initial Coin Offerings (ICOs). Entitled “a Guide to Digital Token Offerings,” the document seeks to clarify when an ICO is in fact a security, and thus regulated and the application of securities laws.  MAS published a statement in August warning issuers and offering platforms that ICOs may be regulated in an approach similar to the US SEC. The statement was followed with a warning to investors to be cautious in backing tokenized offerings.

The Guide published today is described as not being exhaustive and “having no legal effect” calling into question its mission. MAS appears to be messaging the ICO community, both issuers and exchanges that facilitate crowdsales and secondary trading, that it continues to study the nascent sector of finance but will act if it believes an offering has ignored existing securities laws.. The final section of the Guide includes a statement on token issuers applying for the MAS Fintech Sandbox:

“Any firm that is looking to apply technology in an innovative way to provide new financial services that are or are likely to be regulated by MAS can apply for the regulatory sandbox. MAS expects that interested firms would have done their due diligence, such as testing the proposed financial service in a laboratory environment and knowing the legal and regulatory requirements for deploying the proposed financial service, prior to submitting an application.”

China, the largest Fintech market in the world, simply banned ICOs, along with exchanges, altogether thus stifling digital token offerings. Once the largest cryptocurrency market in the world, Japan has since emerged as the hot crypto trading market. Singapore is currently in the midst of its annual Fintech Festival, one of the largest financial innovation gatherings in the world.