cryptovest.com
The Monetary Authority of Singapore (MAS) has issued new guidelines on ICO issues and token sales. The changes list multiple actors within the token sale environment and aim to bring the fundraising in line with money laundering and terrorism financing laws.
Due to relatively lenient regulations, Singapore had been one of the hubs for basing startups and launching token sales. The city-state saw about 8.3% of ICOs based under its jurisdiction, raising more than $340 million until the markets peaked. However, with the general drop in ICO fundraising, Singapore also lost its importance, which gives the government the opportunity to bring token sales under control with entirely new rules without staunching an influx of business.
Even if a token is not a security, operators and handlers of digital assets must comply with KYC and anti-terrorism regulations based on a recent Payment Services Act. Singapore’s move shows that digital assets have been recognized as a payment tool, but have not been left completely independent and without restrictions. The new regulations will also mean that crypto-related startups will have a more complex and expensive process of registration. However, the new rules will also allow for the creation of a security token ecosystem in Singapore.
As such, all participants, including token creators, consultants and anyone participating in servicing a token sale, will have to comply with the regulations. Token sellers may have to register and acquire a capital markets services license. Selling tokens in Singapore will, therefore, resemble the selling of stocks, including issuing and registering a prospectus with the MAS.
The new regulations also hint at the need for an entirely new type of exchange that will carry security tokens. Until recently, trading tokens was also a mostly unregulated activity, often relying on decentralized exchanges when all other markets failed to list the new asset. However, with the drive to offer security tokens, there is more talk of the need for a fully legalized marketplace.
Security tokens are seen as the next step in the evolution of digital assets, as having tokens that reflect real-world value would solve the problem of haphazard crypto valuations.