On August 10, 2017, the Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) released a consumer advisory regarding token offerings and cryptocurrencies, which comes a few days after MAS’s August 1 clarification on its position on token offerings.
Like the August 1 clarification, today’s announcement cautions that token offerings are prone to illegal activity, like money laundering, due to the anonymity of transactions and the ease with which funds can be raised quickly. The two announcements also acknowledge that “the function of digital tokens has evolved beyond a virtual currency” and point out use cases, such as representation of ownership or a security interest over a token seller’s assets or property, or a debt owed by the seller.
Today’s advisory also warns consumers about various risks relating to foreign and online operators, sellers who do not have a proven track record, insufficient liquidity and highly speculative investments, and investments that promise high returns. In a nutshell, the Singaporean agencies advise consumers to:
MAS invites consumers to visit the MoneySENSE website to ensure that selling parties are properly regulated.
This new, more detailed, guidance from MAS is sure to have an impact on development in Singapore, which is a hub for blockchain technology-based startups, by providing consumers and developers alike a guideline for best practices.
Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.