News of the Week: MAS warns Digital Token Exchanges and ICO Issuer!

The Monetary Authority of Singapore said that digital token issuers, intermediaries and platforms that offer, facilitate or trade digital tokens are responsible for ensuring that they comply with all relevant laws.

SINGAPORE — The Monetary Authority of Singapore (MAS) warned eight digital token exchanges in Singapore not to allow trading in digital tokens that are securities or futures contracts without MAS’s authorisation, it said on Thursday (May 24).

MAS’s stand on Security Tokens

So, MAS states that if the digital tokens constitute securities or futures contracts, the exchanges must “immediately” cease the trading of such digital tokens until they have been authorised as an approved exchange or recognised market operator by MAS.

If the tokens represented equity ownership in a company and therefore would be considered as securities (Security token)under the Securities and Futures Act (SFA).

Security token entitles the holder to ownership rights of the network (or company) as well as promises of dividends/profit sharing in the future.

Utility token has a use case and is not designed as investments. It allows the holder to access certain goods or services provided by the network.

Security tokens are regulated much more heavily than utility tokens as they are regarded as investments under the law.

So, it’s important for participants in the cryptocurrency space to be aware of regulations as it often has a very significant impact on the development of blockchains & cryptocurrencies.

MAS’s stand on Cryptocurrency Exchanges

Mr Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, said “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. But if any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action. 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.”

MAS is not restricting, but regulating the cryptosphere to ensure law and order; in line with SFA.

So, don’t worry! Here at Tokenize, we have done our part as well! Our legal & compliance team has been keeping up to date with regulations. Also, we will be doing our own due diligence while listing new tokens on our exchange.

If you are still looking for a safe & secure exchange, why not join us?

References

https://www.straitstimes.com/business/banking/mas-warns-8-cryptocurrency-exchanges-bars-ico-issuer?xtor=CS3-18

http://www.mas.gov.sg/News-and-Publications/Media-Releases/2018/MAS-warns-Digital-Token-Exchanges-and-ICO-Issuer.aspx

 

Leave a Reply

Your email address will not be published. Required fields are marked *