MAS and ICOs – Does the Monetary Authority of Singapore consider them Securities?

MAS and ICOs: The Monetary Authority of Singapore (MAS) which is the central bank of Singapore has made a statement as to the status of Initial Coin Offerings and their Tokens. The MAS addresses the classification of the tokens and whether or not they are considered securities.

This is not a surprise, after the SEC decision regarding The DAO and finding that it was indeed a security. A large number of token sales are taking place in Singapore and the MAS thought it was time to address the issue.

MAS and ICOs – The Concern

The main question, of course, is whether tokens created during Initial Coin Offerings constitute a security on MSA guidelines. The lack of regulatory information provided by current security guidelines regarding items like Cryptocurrencies and Token leaves this question open.

In a statement released today, the Msa said,:

“The Monetary Authority of Singapore (MAS) clarified today that the offer or issue of digital tokens in Singapore will be regulated by MAS if the digital tokens constitute products regulated under the Securities and Futures Act (Cap. 289) (SFA). MAS’ clarification comes in the wake of a recent increase in the number of initial coin (or token) offerings (ICOs) in Singapore as a means of raising funds.”

The MSA position of not regulating virtual currencies is like in other jurisdictions. However, the MSA has recognized that the playing field has changed and that many of the tokens may be considered securities under the SFA, and subject to the rules of security guidelines set out by the SFA.

Under SFA Guidelines What are the Requirements to be Followed?

The release states,

” Where digital tokens fall within the definition of securities in the SFA, issuers of such tokens would be required to lodge and register a prospectus with MAS prior to the offer of such tokens, unless exempted. Issuers or intermediaries of such tokens would also be subject to licensing requirements under the SFA and Financial Advisers Act (Cap. 110), unless exempted, and the applicable requirements on anti-money laundering and countering the financing of terrorism. In addition, platforms facilitating secondary trading of such tokens would also have to be approved or recognized by MAS as an approved exchange or recognized market operator respectively under the SFA.”

Similar to the findings of the SEC, which I differentiate between differences between different tokens in the post I will include a link to below, the MAS states,

“The types of digital tokens offered in Singapore and elsewhere vary widely. Some offers may be subject to the SFA while others may not be. All issuers of digital tokens, intermediaries facilitating or advising on an offer of digital tokens, and platforms facilitating trading in digital tokens should, therefore, seek independent legal advice to ensure they comply with all applicable laws, and consult MAS where appropriate”

MAS and ICOs – Statement Conclusion

The MSA was careful in their statement not to include all tokens as securities and subject to regulation. They do however state that some are and others may not. As per the last quote, this is obvious. This falls in line, in my opinion with the SEC ruling as well. We will have to see what the long-term ramifications this statement, as well as the SEC ruling has on the ICO market.