ICOs in Singapore has been on an upward trend
As the crypto-token market heats up, Singapore has emerged as one of a few key hubs for blockchain start-ups wanting to launch an initial coin offering (ICO). The city-state is a long-established hub for corporate setup due to its tax-friendly rules, light-touch regulation, and state funding. the function of digital tokens has evolved beyond just being a virtual currency.
What is a digital token:
A digital token is a cryptographically-secured representation of a token-holder’s rights to receive a benefit or to perform specified functions. A virtual currency is one particular type of digital token, which typically functions as a medium of exchange, a unit of account or a store of value.
A major concern of regulators worldwide is that the use of cryptocurrency and the surge in ICOs facilitate money laundering and terrorist financing (ML/TF) risks due to the unidentified nature of the transactions with the ease and simplicity by which large sums of monies may be raised in a short period of time.
MAS does not regulate virtual currencies per se, however, 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. The requirements on anti-money laundering and countering the financing of terrorism would be applicable here, as a given. In addition, platforms facilitating secondary trading of such tokens would also have to be approved or recognised by MAS as an approved exchange or recognised market operator respectively under the SFA.
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 and appropriate advice to ensure they comply with all applicable laws, and consult MAS where appropriate.
Source: Monetary Authority of Singapore
Argus expertise in compliance allows us to mitigate the risks raised by the MAS on the above-mentioned matters. Our AML & CFT processes and policies enable ICOs in Singapore to carry out the relevant due diligence as made necessary by the MAS. Cryptocurrency need not be looked at as a tool for money laundering if the framework governing this new market segment is adequately protected by the right governance methods, and enforcers to follow suit. We look forward to seeing how the market progresses in this manner.
Do get in touch with us if you are unsure of where your ICO stands in the market, and we can help you figure out whether this would be deemed a regulated activity by the MAS.