Singapore: Laws Related to Token Sales, Blockchain, and Digital Proof

As of Oct 25, 2017, the director of the Monetary Authority of Singapore (MAS, Singapore’s de facto central bank) noted that Singapore has no current plans to regulate cryptocurrencies used as currency. However, Singapore does regulate crypto tokens if it interprets them as operating as securities under the Securities and Futures Act (SFA, see below section for an overview). See this source for a feel of Singapore’s direction on blockchain regulation, as of Oct 2017.

On Nov 14, 2017, the MAS said that: “Offers or issues of digital tokens may be regulated by MAS if the digital tokens are capital markets products under the SFA. Capital markets products include any securities, futures contracts and contracts or arrangements for purposes of leveraged foreign exchange trading.” The MAS provided a detailed document elaborating on its position and giving some case studies which determine whether or not a particular token would count as a security, which is worth reading in detail, some factors being the “promise of a dividend or other economic benefits”.  The original guidance (August 1, 2017) that classifies some ICOs as securities or not is also worth reading in full here.

In the case studies

  • A Company which desires to set up a platform to enable sharing and rental of computing power and distributes tokens used to pay for computer power may not be subject to SFA regulations as its tokens would not constitute securities.

  • A Company who distributes tokens structured to represent a share of a business or project will likely be subject to SFA regulations as its tokens would constitute securities.

  • A Company who exchanges tokens in return for funds that are managed in a portfolio are likely subject to SFA regulations.

  • A Company who exchanges tokens only to persons outside of Singapore will not have most of the SFA regulations apply.

  • A Company who exchanges tokens which represent loans will likely be subject to SFA regulations.

  • A Company which operates an exchange that trades tokens to fiat, as long as those tokens do not constitute securities, would likely not have the SFA regulations apply. Bitcoin, for example, is not considered a security in Singapore. However, if the exchange starts exchanging any tokens that do constitute securities, then it will will need to be approved by MAS.


A source recommends that if there is any chance that the token that an organization is offering can be construed as a security, the organization probably will have to to include a prospectus compliant with SFA requirements for disclosure, and that the organization should also consider if they may be subject to regulation from the MAS as intermediaries, “particularly for the activity of ‘dealing in securities’, or for the activity of ‘marketing of collective investment schemes’”. (source)

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