ICO faces severe crackdown, will Singapore become a safe haven for blockchain startups?

Singapore is gradually becoming a favorite place for ICO blockchain startups due to the recent crackdown by the Chinese government on ICOs. The country has long been a hub for startups due to its favorable tax policies, a suitable regulatory environment, and state funding. In the past few years, Singapore has incubated a number of successful ICO projects.

Singapore’s Efforts to Regulate Blockchain and Cryptocurrencies

The Singapore government, through its central bank (MAS), has launched a series of programs to support the financial technology (fintech) industry. One of the initiatives is to allocate US$166 million for the development and application of fintech projects.

In addition, the Singapore central bank has also launched a token version of the Singapore dollar, called "Project Ubin", showing its welcome to crypto assets. The token is currently circulating on the Ethereum-based blockchain. It is reported that the project aims to create a functional alternative network for the Singapore interbank payment network.

At the same time, the Singapore central bank plans to regulate digital currencies and protect ICO-related activities. In addition, the central bank also hopes to maintain Singapore's status as a financial center and prevent money laundering.

Regarding the position on digital token ICOs, the Central Bank of Singapore mentioned in a previous statement:

“MAS’s current position that it does not regulate virtual currencies is similar to that of most jurisdictions. However, MAS has noted that digital tokens may have functions beyond those of virtual currencies, for example, digital tokens may represent title to, or security interest in, assets or property of the issuer. Such tokens may be regarded as shares or units in a collective investment scheme as defined under the Securities and Futures Act (SFA). Digital tokens may also represent a debt owed by the issuer and be regarded as debentures under the SFA.

If digital tokens fall within the definition of securities under the Securities and Futures Act (SFA), token issuers must report to MAS and register a prospectus before issuing such tokens, unless exempted. Issuers or intermediaries of these tokens are also subject to the Securities and Futures Act (SFA) and the Financial Advisers Act (Cap. 110), unless exempted, and are also subject to anti-money laundering and counter-terrorist financing requirements. In addition, platforms that facilitate secondary trading of these tokens must also be approved by MAS as market operators regulated by the Securities and Futures Act (SFA).”