Singapore: MAS to consider targeted cryptocurrency regulation as market matures

Blockchain/Bitcon. Photo: Bloomberg

The Monetary Authority of Singapore (MAS) will consider more targeted legislation of both cryptocurrencies and token sales as activity in the sector matures in the city-state.

In an announcement on 3 October, Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS, elaborated: “MAS has been monitoring the use of such virtual currencies. Their use is not prevalent in Singapore – about 20 Singapore retailers like restaurants and online shops currently accept Bitcoins. This is unlike places like Japan, where the use is more popular.”

“Likewise, in the Singapore financial industry, use of virtual currencies as a mode of payment is not significant. Trading is generally for speculative investment purposes, and the volume is low compared to other countries such as US, Japan and Hong Kong. Similar to most jurisdictions, MAS does not regulate such virtual currencies per se. However, we regulate the activities that surround them if those activities fall within our more general ambit as a financial regulator.”

Shanmugaratnam noted that at this time, the MAS was working on new payment services regulatory framework to address the risks of laundering and terrorism financing that virtual currencies posed.

The city-state has developed into a leading destination for ICO activity in Asia, with the MAS already clarifying in an August announcement that only if a token is structured in the form of securities must it then comply with existing securities laws to safeguard investors’ interest.

Shanmugaratnam noted: “MAS has not issued new legislation specifically for ICOs. We will continue to monitor the developments of such offers, and consider more targeted legislation if necessary.”

In an interaction with this portal, Dr Finian Tan of Singapore-based Vickers Ventures Partners, which recently closed its fifth fund at $230 million, noted that ICOs had emerged as a new tool for entrepreneurial finance but that due to its relative youth, there were significant risks and intense speculation accompanying it.

He opines: “In an ICO, you’re making two bets. One bet is on the company and another bet on the cryptocurrency going up, making it two bets at once. Secondly, the guy who is raising money only knows about his business and is clueless about where Bitcoin is going. So, he is helping you [investors] make two bets but they can only control one. The value of the cryptocurrency he’s issued is out of his hands. So what should he do? So logically, what he should do is convert all the digital currency he’s raised into US dollars to mitigate the risk.”

Referring to it as a “fictitious way of raising money”, Tan noted that regulations had not caught up and that despite the loopholes they presented, in the case of ICOs, it was necessary for caveat emptor to prevail, with the onus on the ICO issuer to provide information.

Also Read:

ICO investors to face steep losses in crypto ‘mania’, says hedge fund titan Kyle Bass

Entrepreneurs should approach ICOs cautiously: John Fearon, Sugar Ventures

Myanmar: Karen Enterprises, IDPM aim to raise $100m via ICO for city development

Japan’s QUOINE plans to raise $147m through ICO starting October 21

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.