Globally, there is an emergence of initial coin (or token) offerings (“ICOs”) as a source of funding for startups and technology companies latching onto the digital token trends. The Singapore Business Times reported that based on information obtained from, there were 34 ICO projects raising USD 665 million in July 2017 alone. Singapore has also seen its fair share of ICOs and digital tokens offering, ranging from property backed tokens to crowdfunding platforms for entrepreneurs to raise funds by issuing tokens sold for virtual currencies.

The trend has not escaped the scrutiny of the regulators in Singapore. On 10 August 2017, the Monetary Authority of Singapore (“MAS”) and Commercial Affairs Department issued a joint statement here, advising consumers on the risks associated with digital token and virtual currency related investment schemes.  This follows on from an earlier public release by MAS on 1 August 2017, clarifying the regulatory position on the offer of digital tokens in Singapore.

Do securities regulations in Singapore apply to ICOs?

The short answer to this is that existing securities regulations do need to be considered carefully before concluding that such activities are not subject to any securities law or regulations.

One should look at the substance and nature of the digital tokens and the rights attached to it (rather than what it is labelled as), and determine if the digital tokens amount to “securities” or other capital market products under the Securities and Futures Act (“SFA”). Where the tokens amount to securities, the ICO may be subject to prospectus requirements under the SFA. Intermediaries who facilitate ICOs or crowdfunding platforms may need to hold a licence for dealing in securities. Platforms that provide secondary trading for digital tokens may need to be approved or recognized as a securities market if the tokens traded include “securities”. Even if the tokens fall outside the parameters of the SFA, they may be regarded as stored value facilities and the holder of the funds may need to be approved by the MAS if the relevant threshold is crossed. 

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Contributors: Stephanie Magnus and Eunice Tan