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MAS to Regulate Digital Token Crowdfunding

Written by: Bridgewest

MAS-to-regulate-digital-token-crowdfundingSingapore is one of the most developed countries in the world when it comes to new technology being implemented in day-to-day activities and services used by the population. However, the business community also benefits from the most recently launched IT developments which enable Singapore companies to use modern financial technology when supplying their services. Crowdfunding, blockchain and cryptocurrency are often mentioned in the city-state as making companies’ access to clients easier. This why the Monetary Authority of Singapore (MAS) is now planning to regulate the use of digital tokens. Our Singapore lawyers can offer information on the current legislation related the fintech industry.

Where will digital tokens be used, according to the Singapore Central Bank?

Singapore host one of the greatest number of crowdfunding platforms in the Asia Pacific region which involve the use of digital money such as Bitcoin, which explains the MAS’ decision to create a legal framework through which companies can use digital tokens for various activities. Among these activities, MAS representatives are considering fundraising, share offers and the use of cryptocurrency as units in investment funds. The Singapore Financial Authority (SFA) could even consider the use of digital tokens as debentures.

Our law firm in Singapore can offer information on the requirements to set up investment funds.

The number of initial coin offerings has grown in Singapore

The MAS and the SFA have decided on regulating the use of cryptocurrency as a consequence of the raising number of initial coin offerings (ICOs) in the last few months of 2017. Many of these ICOs have issued digital tokens falling within the scope of the SFA’s regulations related to the issuance of securities used in collective investment schemes.

MAS proposes for Singapore companies issuing digital tokens to submit a prospectus followed by obtaining appropriate licenses with the SFA.

MAS’ decision has determined a Russian company to announce its intention of setting up a special purpose vehicle in Singapore through which it intends to raise 5 million USD by using an ICO. The money will be invested in a fundraising accelerator.

If you want to start a fintech company in the city-state and need help, please contact our lawyers in Singapore.


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