A wake-up call for Singapore’s blockchain companies

MAS headquarters in central Singapore / Photo credit: Tech in Asia

From banks to mom-and-pop investors, more players are crowding into the crypto space and this influx is keeping regulators on their toes.

In late May, the Monetary Authority of Singapore (MAS) issued a warning to eight digital token exchanges, prohibiting them from trading digital tokens that are securities or futures contracts without approval.

The platforms must halt the trading of such tokens until they are authorized, said Singapore’s central bank. These crypto exchanges commonly allow the buying and selling of tokens using fiat currency and also facilitate the swapping of tokens between users.

MAS ordered one issuer to stop selling its tokens because it launched an initial coin offering (ICO) without a registered prospectus, which is a requirement for securities-related products. In compliance with the rule, the issuer has taken “remedial actions” and given back all the funds it received from Singapore-based investors, according to the regulator.

Here to stay

But experts interviewed by Tech in Asia said that there’s no need for crypto companies in Singapore to panic, as the announcements are just part of the central bank’s push to refine regulation.

If anything, Singapore’s rules are providing greater clarity and showing that the government takes the crypto game seriously, they added. More importantly, the increased scrutiny indicates that MAS believes the crypto economy isn’t going away.

As such, crypto companies that mean real business should welcome the city-state’s stance and not fear it.

Photo credit: Dzmitry Kliapitski

“These announcements are not a tightening but rather a wake-up call to token providers and exchanges that may not be taking the current regulations on token offerings seriously enough,” explained Paul Griffin, director of Singapore Management University’s Masters of IT in Business program.

MAS also wants to “send a message out to token providers to ensure that Singapore remains a safe place to do any form of business,” he continued.

Varun Mittal, ASEAN fintech lead at consultancy firm Ernst and Young, thinks that the MAS announcements are neither “revolutionary” nor “groundbreaking.” Instead, it’s a reminder to the community that Singapore’s regulators are “watching.”

Griffin added that MAS is stepping up its efforts to clarify policies because the longevity, volumes, and future potential of tokenization are forcing it to “understand, scrutinize, and decide how best to regulate the digital token market.”

Regulations welcome

Global phenomena

Defining tokens