The Monetary Authority of Singapore (MAS), the country’s central bank and chief financial regulator, has warned a security token project to halt its planned Security Token Offering (STO) until it complies with regulations.
According to a press release issued on Thursday, Jan 24, the MAS warned the unnamed STO project not to proceed with its token offering until it fully
The MAS went on to highlight how the STO had breached regulations by advertising its token offering on LinkedIn, thereby making it subject to the condition that it must register a prospectus with the financial regulator.
“The issuer had intended to rely on an exemption under the SFA, which allows an issuer to make an offer of securities to accredited investors without registering a prospectus with MAS. The exemption from prospectus registration is however subject to certain conditions, including a requirement not to advertise the offer,” noted the press release.
Mr Lee Boon Ngiap, MAS Assistant Managing Director (Capital Markets) said: “Where an offer is made to the public, a prospectus is required to ensure that investors are provided with all the information to make informed investment decisions. Some offers may be made without a prospectus if they are limited to a restricted group of persons or to those who have the means to look after their own interests. Such offers are subject to strict conditions such as advertising restrictions. MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA.”
The MAS reiterated that all digital token issuers in Singapore offering securities tokens must comply with the applicable securities laws, including the requirement to register a prospectus with MAS, and repeated its standard warning about the risks of investing in crypto projects.
“Consumers should ensure that they understand the benefits and risks of any product or service before parting with their monies. Specifically, for digital token offerings, the risks include a highly speculative valuation, heightened risk of fraud and lack of a proven track record. This makes it difficult for investors to establish the credibility of the offerings,” it said.