The Monetary Authority of Singapore clarifies the regulatory position on Singapore’s digital tokens


nnnThe Singapore Monetary Authority (MAS) today clarified its position on the initial digital tokens issue, the ICO’s regulatory position. The HKMA said that if the digital tokens constitute a regulated product in the Securities and Futures Act, the sale or issue of such a digital tokens in Singapore will be subject to the supervision of the Monetary Authority. However, the size of the digital tokens is very different, so whether its issuance or sale falls within the scope of supervision requires a specific case-specific analysis. Therefore, the HKMA recommends that the issuer, the intermediary and the trading platform seek legal advice separately.n
nnTranslation: Clovern
nOn August 1, 2017, the Singapore-Monetary Authority (MAS) today showed that if the digital tokens constitute a regulated product in the Securities and Futures Act (Chapter 289) (SFA) Singapore’s offering or distribution will be subject to the supervision of the Monetary Authority. The number of financing methods for Singapore’s initial digital currency (or tokens) issuance (ICO) has increased in recent days before the Hong Kong Monetary Authority has made this statement, and the attendance of the HKMA has shown that regulation position.n
n2: Digital tokens are a form of expression that is protected by encryption and can generate benefits or perform specific functions on behalf of the token holder. Virtual currency is a specific form of digital tokens, usually used as a trading medium, accounting unit or value storage means.n
n3: ICO is vulnerable to the risk of money laundering and terrorist financing (ML / TF) due to the anonymous nature of such transactions and the ease of raising large amounts of funds in a short period of time. The media report on March 13, 2014 shows that although the virtual currency itself is not regulated, the intermediary of the virtual currency will be regulated by ML / TF risk. The HKMA is currently assessing how to regulate the ML / TF risks associated with activities involving digital tokens, which do not only function only as virtual currency.n
n4: The HKMA’s position on the regulation of virtual currency is similar to that of most jurisdictions. However, the HKMA has also noted that the function of digital tokens has evolved beyond what is now only as a virtual currency. For example, a digital token may represent ownership or security interest in the issuer’s assets or property. Thus, such tokens may be treated as shares or units in the SFA collective investment scheme. The digital tokens may also represent the debts owed by the issuer and may be treated as a corporate bond based on SFA.n
n5: If the digital tokens are defined in SFA, unless the exemption is granted, the issuer of these tokens must submit the prospectus and register with the HKMA before issuing such tokens. Unless otherwise exempted, the issuers or intermediaries of these tokens will also be subject to the licensing requirements of the SFA and Financial Adviser Act (Cap. 110), as well as the application of anti-money laundering and the fight against the financing of terrorism. In addition, the platform that facilitates such surrogate transactions must also be approved or approved by the HKMA under SFA to become an approved exchange or an approved market operator.n
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