SUMMARY OF RECENTLY ISSUED GUIDE TO DIGITAL TOKEN OFFERINGS

      The issued guide provides for general points relating to the application of Securities Law administered by the Monetary Authority of Singapore (MAS) in relation to offers or issues of digital tokens in Singapore. As per the guide, digital tokens may constitute securities and be regulated by the MAS if they fall within the definition of “capital market products” under the existing laws. This could mean any securities, futures contracts, contracts or arrangements for the purposes of leveraged foreign exchange trading, and such other products as may be prescribed. A digital token may constitute a share, a debenture or a unit in a collective investment scheme (CIS). A person may only make an offer of digital tokens which constitute securities or units in a CIS if such an offer complies with relevant regulations. This includes the requirements that the offer must be made in or accompanied by a prospectus that is prepared in accordance with the SFA and is registered with MAS. MAS has observed that the following types of intermediaries typically facilitate offers or issues of digital tokens

      1. a person who operates a platform on which one or more offerors of digital tokens may make primary offers or issues of digital tokens,
      2. a person who provides financial advice in respect of any digital tokens,
      3. a person who operates a platform on which digital tokens are traded.

      MAS have emphasized in relevant legislation that the prevailing Anti Money Laundering & Countering the Financing of Terrorism laws apply across the board to all Financial Institutions and instruments. Digital tokens that perform functions which may not be within the MAS’ regulatory purview may nonetheless be subject to other legislation for combating money laundering and terrorism financing. With that said, MAS intends to establish a new payments services framework that will include rules to address money laundering and terrorism financing risks relating to the dealing or exchange of virtual currencies for fiat or other virtual currencies. Such intermediaries will be required to put in place policies, procedures and controls to address such risks. These will include requirements to conduct customer due diligence, monitor transactions, perform screening, report suspicious transactions and keep adequate records. We here at Argus (now Waystone Compliance) are looking forward to seeing the regulatory environment evolve and adapt to provide for new technology and cryptocurrencies, and we are excited to be a part of this progression in the industry. If you have any questions or queries relating to this subject please feel free to reach out to us at compliancesolutions@waystone.com.

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