There are new guidelines about the Initial Coin Offerings (also known as ICOs) set by Singapore's central bank which will give guidelines on the proce
There are new guidelines about the Initial Coin Offerings (also known as ICOs) set by Singapore’s central bank which will give guidelines on the procedure of applying for tokens under their new security law.
In the document which was named ‘A Guide To Digital Token Offering’, has the following statements from Singaporean Central Bank and Monetary Authority of Singapore: The issuing or offering of the tokens will be regulated by MAS if the tokens are products of the capital market as per the security and future acts (SFA). Examples of capital market products are futures, securities, contracts, and arrangements that are made for leveraging trading in the foreign exchange.
It adds that the structure and characteristics will be examined in order to determine whether or not it is a market product under SFA. Digital tokens have the following, according to reports:
Cryptocurrencies have a share, where it provides benefits or represents interests to do with ownership, accountability of the token holder in the corporation and the agreements mutually made among token holders in the corporation among themselves.
Digital currencies have a debenture, which constitutes and shows evidence for indebtedness of the one issuing digital tokens as per the money which is lent by a token holder to the issuer.
Tokens also have an unit in a collective investment scheme (CIS) which is a representation of the interests and rights in a CIS or the choice of acquiring the right in a CIS.
The report has a selection of case studies, showing how the security laws which are administered by MAS apply. However, these are not conclusive or inductive of how the laws may apply in certain cases involving offering or issuance of digital tokens.
In the first case study, the focus is on tokens which are tied to rental or sharing of computing power among the users of this platform. MAS has said that this will exclude securities under SFA. In the second case, property development, and operation of commercial buildings will be done by offering digital tokens which represent a share in the company. The regulator states that this will be inclusive of the securities under SFA.These guidelines that have been provided by MAS emphasizes the later comments from the central bank that ICOs needs to be regulated under SFA. The financial regulator announced in August that it will regulate how the ICOs and digital tokens are issued. Singapore was experiencing an increased number of sales of the tokens as a way of raising funds while having concerns about the rise in digital currency which was exceeding the virtual currency.