Singapore’s security token offering Regulation

Securities Token Offerings Becoming a New Trend

The Singapore government is quite friendly towards crypto among the Asian market. In 2016, the Monetary Authority launched the regulatory sandbox, especially for fintech firms, to carry out experimental products and services in a production environment, in hopes to spread wider adoption.

The Monetary Authority then released “A Guide to Digital Token Offerings,” as tokens constituting with a security element, like shares or debentures, may be regulated by the Securities and Futures Act. The applicant would just need to go through the traditional means of registering with MAS and disclosing its financial information through prospectus requirements. STOs (security token offering) seem quite applicable to the existing local framework, which may be a positive sign coming from an official government.

The guide also includes particular situations. If the issue size does not exceed of $5 million offering within any 12-month period; a private placement does not exceed 50 persons in any 12-month period; institutional or accredited investors only, then the STO project may be exempt from the prospectus requirements.

The public sector is aggressive in developing the crypto space as well. Recently the Singapore Exchange and MAS had successfully developed the capabilities for settlement of tokenized assets in cross blockchain platforms. With Binance extending the business to the Lion City, we could see a huge potential for STO market in coming decades.

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