MAS warns 8 Singapore-based digital token exchanges, ICO issuer

SINGAPORE: Eight digital token exchanges based in Singapore have been warned not to facilitate trading in digital tokens that are securities or futures contracts without authorisation, said regulator Monetary Authority of Singapore (MAS) on Thursday (May 24).

It has also warned an initial coin offering (ICO) issuer to stop the offering of its digital tokens to Singapore investors, the press release said. 

MAS said it reminded the token exchanges, which were unnamed, to seek its authorisation if the digital tokens traded on their platforms constitute securities or futures contracts under the Securities and Futures Act (SFA). 

Digital token exchanges commonly allow the buying and selling of digital tokens using fiat currency, and also facilitate the exchange of digital tokens between their clients, according to the press release.

“The number of digital token exchanges and digital token offerings in Singapore has been increasing. We do not see a need to restrict them if they are bona fide businesses,” said MAS assistant managing director for Capital Markets Lee Boon Ngiap. 

“But if any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action.”

The regulator also directed an ICO issuer to stop offering digital tokens to Singapore-based investors, after assessing that the issuer had contravened the SFA as its tokens represented equity ownership in a company, which would be considered as securities under the SFA.

The offer was made without a MAS-registered prospectus, it added.

The ICO issuer has since ceased the offer and taken remedial actions to comply with regulations, as well as returned all funds received from Singapore-based investors, the regulator said. 

“The public should be aware that there is no regulatory safeguard if they choose to trade on unregulated digital token exchanges or invest in digital tokens that fall outside the remit of MAS’ rules,” Mr Lee said.