- The Singapore watchdog has released a complete guide to ICO legality
- This guide has been made to help businesses wanting to invest in initial coin offerings
- It also offered vital information about the country’s required ICO securities and licenses
Singapore has always been relatively open to blockchain technology and cryptocurrency trading. In fact, the country is home to some of the biggest cryptocurrency exchanges in the world like Huobi and Binance.
To support our growing industry, the Monetary Authority of Singapore has released a complete guide to ICO legality. This move has been made to help businesses wanting to know how to profit through initial coin offerings in the country. It lists 11 different types of tokens, all of which have different legal obligations. The guide is educational and informative, offering vital details about the the nature of cryptocurrency investments and the risks associated with them.
In line with this update, the Singapore government has clearly stated that there are still chances of losing money in this investment. They also said that there is no legislative protection given to those who may lose money in digital tokens like ICOs. According to CrowdStrike’s Vice President, Adam Meyers, people need to be informed of online threats involving cryptocurrencies given how the government of Singapore is welcoming such technologies.
What You Need to Know About Singapore’s ICO Securities and Licenses
In August 2017, the Monetary Authority of Singapore or MAS has announced that ICOs should follow the same laws as what debentures, shares, securities-based derivative contracts, and business trust units are following. In the new guide they have released, they said that the tokens can be exempt from some of the rules provided that they meet certain criteria:
- if they are worth under 5 million Singapore dollars (3.6 million USD)
- if they are to be distributed to fewer than 50 investors
- if they are distributed amongst institutional/accredited investors.
According to a report, there are 3 different types of people that sell tokens. These types include people who are producing the tokens, people who manage an exchange where the tokens are traded, and people who provide financial advice. MAS said that all of these 3 activities are subject to the law.
Project owners need to have their capital markets services license. Exchange owners must have their businesses approved by the MAS, and financial advisors must hold a financial advisory licence (from the FAA).
Even tokens that are not securities will need to have their licenses. This will serve as a proof that they are following their anti money-laundering and terrorism obligations. They also need to submit a report stating all of their transactions to the police to prove that they are not working with any terrorists.
Here’s a list of what digital token investors need to do according to the Singapore government:
Research before investing – spend time to study the benefits and risks of the product or service where you’re planning to invest in.
Make an assessment – make an assessment about the product’s features to see if it meets your needs.
Do some fact checking – check if the provided given to you are factual.
Confirm the company’s legitimacy by checking with external resources. These resources include:
- MAS’ Financial Institutions Directory
- MAS’ Register of Representatives
- Investor Alert List
While the cryptocurrency investor guide is not an exhaustive handbook, Singaporean investors can use it as a starting point for exploring this area. This guide is being welcomed by the retail investors and the whole investing community. It only shows that the Singapore government is taking an approach towards better cryptocurrencies and even helps in creating a conducive environment where people can foster innovation.