The Monetary Authority of Singapore issued guidelines on initial coin offerings (ICOs) and how securities laws apply to the issuance of digital tokens. Relevant portions of the guidelines include:
- On 1 August 2017, the Monetary Authority of Singapore (“MAS”) clarified that if a digital token constitutes a product regulated under the securities laws administered by MAS, the offer or issue of digital tokens must comply with the applicable securities laws.
- This paper provides general guidance on the application of the securities laws administered by MAS in relation to offers or issues of digital tokens in Singapore.
- Offers or issues of digital tokens may be regulated by MAS if the digital tokens are capital markets products under the SFA. Capital markets products include any securities, units in a collective investment scheme, derivatives contracts and spot foreign exchange contracts for purposes of leveraged foreign exchange trading.
- MAS will examine the structure and characteristics of, including the rights attached to, a digital token in determining if the digital token is a type of capital markets products under the SFA.
A digital token may constitute:
- a share, where it confers or represents ownership interest in a corporation, represents liability of the token holder in the corporation, and represents mutual covenants with other token holders in the corporation inter se;
- a debenture, where it constitutes or evidences the indebtedness of the issuer of the digital token in respect of any money that is or may be lent to the issuer by a token holder; or
- a unit in a collective investment scheme (“CIS”), where it represents a right or interest in a CIS, or an option to acquire a right or interest in a CIS.
Exemptions from registration can apply in qualifying circumstances, such as those which constitute a "small offer" which do not exceed S$5 million, offers of private placements to 50 or less persons, to institutional investors and accredited investors under certain conditions.