MAS Notice on warnings issued to Digital Token Exchanges



MAS Notice on warnings issued to Digital Token Exchanges

A photo of the Monetary Authority of Singapore

Date Published: 25 May 2018

Authors and Contributors: Quek Li Fei, Mike Chiam, Samuel Ling, and Adrian Toh.


On 24 May 2018, the Monetary Authority of Singapore (“MAS“) announced that it has issued a warning to eight (8) digital token exchanges (also known as cryptocurrency exchanges) in Singapore which allow the buying and selling of digital tokens on their platform. In line with the MAS Notice of 14 November 2017, MAS included a reminder that digital tokens or cryptocurrencies may constitute “securities” under the Securities and Futures Act (Cap. 289) (the “SFA“), and if any exchanges allow digital tokens to be traded on their platform, they should seek MAS’ authorization. Consequently, the exchanges must cease the trading of such digital tokens until the MAS has given them approval or recognition to continue trading. Click here to access the MAS Notice of 24 May 2018.


In addition, MAS also directed a token-issuing entity (the “issuer“) to cease their Initial Coin Offering which has contravened the SFA as their tokens represented equity ownership in a company and therefore constitutes “securities” under the SFA. MAS reiterated that ICO issuers will need to comply with all relevant laws and applicable regulations, in particular, any offering of securities will need to fulfil the prospectus requirements under the SFA (unless exempted).


MAS is also looking at expanding the existing category of Recognised Market Operators (“RMOs“) to three (3) tiers in a consultation paper released on 22 May 2018 (viz. RMO Tier 1, RMO Tier 2 and RMO Tier 3). Please follow this link to the consultation paper on RMOs. (We note, that a separate consultation paper was also released on 22 May 2018 by MAS which relates to the notification regime for products that list and delist on Approved Exchanges and RMOs).


This update is provided to you for general information and should not be relied upon as legal advice.

Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.


CNPLaw’s Blockchain, Cryptocurrency and Initial Coin Offerings (ICOs) Lawyers

Quek Li Fei Legal Partner at CNPLaw LLP image


In addition to Li Fei’s experience in acting for banks on varied transactions and in general corporate law, he also helps individuals in estate planning, including the legal aspects of wealth management, advising on and setting up trusts and off-shore structures to secure their future and the future of their families. For 2020, Li Fei is recommended by The Legal 500 Asia Pacific for the Financial Services Regulatory practice.

We have a particular passion and interest in blockchain technology applications, cryptocurrencies and ICOs. We currently advise issuers of tokens, ICO advisors, venture capital firms and entrepreneurs involved in this space on Singapore legal issues and regulatory compliance for a range of planned business activities, ranging from utilization of blockchain to enable business applications in diverse fields (including money remittance, solar energy, consumer rewards, structured social interaction; music and entertainment industry; holiday & leisure industry; employment marketplace, consumer rewards, crypto-asset security applications); to setting up cryptocurrency exchanges and issue of tokens on proprietary platforms.