The Monetary Authority of Singapore (MAS) said in an announcement on Thursday, January 24, that it has prevented an unnamed crypto startup in the country from launching a security token offering (STO).
The anonymous project failed to comply with regulatory requirements binding the issuing of a security token offering in Singapore, hence the halt by the MAS.
Where Did The Halted STO Get it Wrong?
As per the notice, startups and companies who wish to issue a security token offering (STO) to Singaporeans are expected to :
Register with the MAS and comply with local securities law
Apply for an exemption with MAS and abide by local laws for exempted STOs including advertising restrictions.
The halted STO did comply with the MAS by filing for an exemption. However, it failed to abide by laws for offerings in this category. Pinpointedly, the document notes that the project was unable to heed warnings about advertising by promoting its offering via a Linkedin post.
The Regulators suggested that any STO launched under an exemption from a registration prospectus should be open to only accredited investors who have a certain amount of assets in their portfolio.
Mr. Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS explained the advertising restrictions in the notice,
“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 interests.”
Advertising the STO on LinkedIn would be the same as advertising to a global audience, a move that does not align with local securities law for an offering. Mr. Ngiap added,
“MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA.”
Meanwhile, the warned project has suspended its STO until it meets up with the MAS’s directive, the notice confirmed
Singapore is one of the few countries in the world that enjoy a regulated crypto ecosystem. In December, the Asian nation updated its guideline for ICOs to ensure more cover for mainstream investors.
The Monetary Authority of Singapore (MAS) also amended the country’s Payment Services Bill in November, to bring cryptocurrencies like Bitcoin and Ethereum under their watch.