MAS Stops an STO due to regulatory breach

Monetary Authority of Singapore (MAS)

The Monetary Authority of Singapore (MAS) issued on Jan 24 an announcement that it has halted a Security Token Offering in Singapore from an initial coin offering (ICO) issuer.

According to MAS, the issuer had tried to launch an STO, relying on an exemption under the Securities and Futures Act (SFA), which enables an issuer to make a securities-related offer to accredited investors without registering a prospectus with MAS.

Nonetheless, such exemption is subject to certain conditions, including a requirement not to advertise the offer, and the issuer has failed to abide by the condition. Consequently, the issuer cannot continue the offering until it can fully adhere to regulatory requirements under the SFA.

MAS also reminds consumers that they should ensure they understand the benefits and risks, including a highly speculative valuation, heightened risk of fraud and lack of a proven track record, of any product or service before committing to an investment.

Lee Boon Ngiap, Assistant Managing Director (Capital Markets) of MAS 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.”

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