Singapore Cryptocurrency regulations

singapore-ico-law

Blocks Ventures is based in Singapore and obviously any regulatory announcements around this are important.

So when news from the Singapore MAS comes out this is important.  So when Mr. Shanmugaratnam stated that the MAS has determined cryptocurrency and ICOs to fall outside of its current financial legislation this was an interesting statement.

https://news.bitcoin.com/singapore-to-regulate-cryptocurrency-based-businesses-not-cryptocurrency-itself/

There is still a need to determine if tokens being traded are utilities or securities, which can be done based on each tokens rights, function etc.

You can do both tokens legally but there are caveats to how you can do this.

In Singapore the most interesting piece of regulation is the Singapore MAS Small Offerings exemptions legislation:

http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Securities%20Futures%20and%20Fund%20Management/Regulations%20Guidance%20and%20Licensing/Guidelines/Guidelines%20on%20Personal%20Offers%20made%20pursuant%20to%20the%20Exemption%20for%20Small%20Offers%20revised%20on%208%20June%202016.pdf

The takeaways from this legislation is that you can offer a security with the following rules:

  1. Less than S$5m
  2. Up to 50 investors
  3. Investors can’t sell for 6 months
  4. Company cannot issue another offering for 12 months

The utility argument is more based around the fact that the utility token is basically a product and not have security features. The best way to determine whether a token is a security or not is to do a Howey Test which is the test used by US regulators to determine is a instrument/product is a security or not.

The main questions in a Howey test are:

  1. It is an investment of money?
  2. There is an expectation of profits from the investment?
  3. The investment of money is in a common enterprise?
  4. Any profit comes from the efforts of a promoter or third party?

Disclaimer please consult with a lawyer to determine what you are doing is a utility, security etc. By no means take this as a formal legal opinion.

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