SINGAPORE, Aug 1 (Reuters) – Singapore’s central bank said on Tuesday (Aug 1) it will regulate issuance by companies of digital tokens called “initial coin offerings” if it judges them to be securities under the city-state’s law.
Globally, new technology companies have been raising millions quickly by creating and selling digital tokens in such offerings with little regulatory oversight.
Initial coin offerings are vulnerable to money laundering and terrorist financing risks due to the anonymous nature of the transactions, and the ease with which large sums of monies may be raised in a short period of time, the Monetary Authority of Singapore (MAS) said.
The MAS, which is also Singapore’s financial regulator, said it is assessing how to regulate risks associated with activities involving digital tokens that do not function solely as virtual currencies.
As the types of digital tokens varied widely, some offers may be subject to Singapore’s Securities and Futures Act (SFA), while others may not be, the central bank said in its statement issued to clarify the regulatory position on such offerings.
“Where digital tokens fall within the definition of securities in the SFA, issuers of such tokens would be required to lodge and register a prospectus with MAS prior to the offer of such tokens, unless exempted,” it said.
Last week, Wall Street’s main regulator said initial coin offerings should be subject to the same safeguards required in traditional securities sales.