Local ICO in Singapore has been shut down because of the alleged offering of unregistered securities by the Monetary Authority Of Singapore, which is strictly dealing with problematic ICOs. MAS revealed that the assessment conducted showed that an ICO issuer had violated Securities and Features Act (SFA) as the tokens represented equity ownership in a company hence the ICO issuer was directed to stop offering token to investors based in Singapore. The issuer post this instruction had to shut down the ICO and return the funds to the country based investors.
Eight Cryptocurrency exchanges have been served with an official by Monetary Authority of Singapore to not facilitate trading in cryptocurrencies that are securities and future contracts with out MAS authorization. The Central Bank stated –
The offer was made without a MAS-registered prospectus, which is a SFA requirement. The issuer has ceased the offer and has taken remedial actions to comply with MAS’ regulations. It has also returned all funds received from Singapore-based investors.
Cryptocurrency Exchanges And ICOs Under Strict Regulations
It’s is evident that ICOs have been scruitinized by regulators globally. The Securities and Exchanges has been shutting down projects that are violating security law. Not even US but many countries in the world appear to be much more concerned now. Cryptocurrency exchanges allow trading of tokens using fiat currencies they also allow cryptocurrency exchange among users.
In this regard MAS said:
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.
Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, said:
The number of digital token exchanges and digital token offerings has been increasing. 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 public should be aware that there is no regulatory safeguard if they choose to trade on unregulated digital token exchanges or invest in digital tokens that fall outside the remit of MAS’s rules.
It is highly important for an ICO to function under the laws .In many countries it is mandatoy for an ICO to get registered with the government.