Singapore’s central bank and financial regulator has warned eight crypto exchanges against facilitating the trading of digital tokens deemed as securities and futures contracts without prior approval.
In an announcement today, the Monetary Authority of Singapore (MAS) revealed it had reminded eight unnamed crypto trading platforms to seek its authorization prior to offering any trading of digital tokens that ‘constitute’ securities or digital tokens.
“If the digital tokens constitute securities or futures contracts, the exchanges must immediately cease the trading of such digital tokens until they have been authorized as an approved exchange or recognized market operator by MAS,” the country’s de-facto central bank and watchdog said in a statement.
The measures come at a time when the number of exchange platforms and digital token offerings “has been increasing” in Singapore, MAS capital markets official Lee Bon Ngiap said.
Pointedly, he stressed that the authority wasn’t cracking down on the sector but moving to ensure the industry complies with relevant laws while encouraging legitimate businesses. Flouting the warnings and compliance of laws will see ‘firm action’, he warned.
The central bank official said:
“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 MAS has also put the brakes on an initial coin offering (ICO), cautioning the issuer for breaching the Securities and Futures Act (SFA). The central bank determined that the ICO tokens represented equity ownership of the company and hence classified as a security under law. Further, the investor offering was also conducted without a MAS-registered prospectus, a mandatory requirement.
The ICO issuer has since returned all investor funds and ceased the offering to comply with regulations, the statement added.
Singapore has proved to be somewhat of a safe haven for cryptocurrency exchanges and ICO issuers in the aftermath of China’s comprehensive curbs last year.
In November, the MAS notably issued its ‘Guide to Digital Token Offerings’, bringing clarity and recognition to the radical new form of fundraising powered by cryptocurrencies.
More recently, a senior MAS official revealed the central bank was assessing if “additional regulations are required for investor protection” in the domestic cryptocurrency sector.