An official website of Monetary Authority of Singapore (MAS) has published a report of ceasing a security token offering. According to the statement, the firm wasn’t authorized for a certain offering to proceed under the Securities and Future Act (SFA).
MAS Ceased ICO Offering
The news broke out on Thursday, Jan 24, 2019, via the official website of MAS wherein, the blog post, entitled ‘ MAS halts Securities Token Offering for regulatory breach’ states about unnamed ICO violating the law. However, the name of ICO or the company behind offerings is still out of sight but the agency has warned issuer to stop securities token offerings in Singapore. Moreover, the unnamed token found advertising their products/services on Linkedin openly.
Further, it states that the firm is not supposed to proceed token offering in Singapore until it complies with regulatory regime following Securities and Future Act (SFA). Additionally, MAS addresses investors and caution them to have due diligence before investing.
Reason Behind Halt Order
The same blog also claimed that the firm behind ICO planned on using ‘an exemption in Singapore’s Securities and Future Act’ means that the issuer can sell their offerings to ‘accredited investors’ only. However, with this process, issuers are free to make an offer to these accredited investors (high profile/wealthier investors) without having to register a prospectus with MAS. Through this, investors will gain a right to hold ‘particular number of tokens before they invest’. Having said that, the issuer began advertising their tokens on Linkedin social media. Although, this wasn’t the point for halt, but regulators have caught the ICO’s advertisement on Linkedin was redirecting these investors and the general public (as a whole) to invest in the ICO – which is not permissible in the exemption clause.
As a result, MAS ceased the securities offering of the firm. Following such cases, regulatory frameworks on crypto assets may have more stiffen soon in Singapore. Addressing the issue, Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS said in a statement that;
“Where an offer is made to the public, a prospectus is required to ensure that investors are provided with all the information to make informed investment decisions. He continued,
“Some offers may be made without a prospectus if they are limited to a restricted group of persons or to those who have the means to look after their own interests. Such offers are subject to strict conditions such as advertising restrictions. MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA.”
Therefore, once the offer is made to the public in large, it must comply with regulations and as such investors must be conversant with all necessary information.
What’s your point on MAS decision on such offerings? share your thoughts.