A Guide to Digital Tokens

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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.

Document Details

Document Type: 
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Year of Document: 
2018
Date of Document: 
Friday, November 30, 2018
Language (This Document): 
English

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