The Monetary Authority of Singapore (MAS), the country's central bank, has warned an unnamed token issuer via press release not to proceed with its planned security token offering (STO) after it was discovered that the issuer had violated part of the country's Securities and Futures Act (SFA).
According to the release, the firm behind the planned STO had initially set its sights on an SFA exemption, which would allow it to "make an offer of securities to accredited investors without registering a prospectus with MAS." The SFA specifically notes that a securities issuer does not have to register with MAS if "the offer is not accompanied by an advertisement making an offer or calling attention to the offer or intended offer."
This is apparently where the unnamed issuer went wrong. The release states that the firm had published a post on its LinkedIn account that was accessible to the public and called attention to the STO. Lee Boon Ngiap, MAS' assistant managing director, stated, "MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA." As a result, the issuer has reportedly suspended its STO.
MAS also used the release as a reminder to individuals to fully understand an ICO or STO before investing. Investors are asked to remain wary of digital token offerings – and the "heightened risk of fraud" that accompanies them – and to confirm a company's credentials with MAS before investing.
In May 2018, MAS similarly warned an unnamed ICO to cease selling tokens in Singapore after violating the SFA. MAS determined that the issuer of the ICO "had contravened the SFA as its tokens represented equity ownership in a company and therefore would be considered as securities under the SFA." Additionally, MAS asked eight unnamed Singapore-based digital token exchanges to seek authorization with the central bank "if the digital tokens traded on their platforms constitute securities or futures" under the SFA.