The Monetary Authority of Singapore (MAS) said that it has issued a warning to an undisclosed initial coin offering (ICO) issuer not to move ahead with its securities token offering in Singapore till it meets the regulatory obligations.
Image: MAS stops securities token offering for regulatory violation. Photo: courtesy of Glenn Carstens-Peters/Unsplash.com
The securities token offering can be done only after the ICO issuer complies fully under the Securities and Futures Act (SFA), said MAS. Following the regulator’s warning, the issuer has withdrawn its global offering of securities tokens.
According to the Singaporean financial regulatory authority, the issuer planned to use an exemption under the SFA. The exemption enables an issuer to make an offer of securities to accredited investors without having to register a prospectus with MAS.
The regulator said that exemption from prospectus registration is subject to some conditions though such as one that prevents an issuer from advertising the offer.
MAS alleged that the issuer in question did not comply with the advertising restriction by putting out a LinkedIn post through its legal advisers, which is accessible to the public and calls for their attention to the securities token offer. The regulator added that the issuer will not be able to use the exemption from prospectus registration.
MAS Capital Markets Assistant Managing Director Lee Boon Ngiap said: “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.
“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.”
The Singaporean financial regulatory body advised consumers to review the benefits and risks of any product or service prior to making an investment. It said that particularly in the case of digital securities token offerings, the risks are a highly speculative valuation, very high risk of fraud and lack of a proven track record among others.