Singapore – A haven for ICOs after China regulation?

Singapore – A haven for ICOs after China regulation?

The recent rumor regarding the ban on ICOs and cryptocurrency exchanges in China has left markets in a state of uncertainty, but Singapore is preparing to step up, and could very well become the next ICO hotspot.

China’s crackdown rumors

Since January, China has taken a noticeable interest in the cryptocurrency business. The government has forced exchanges to add transactions fees and, more notably, has required exchanges to implement measures to confirm their customers’ identities. However, the most recent news, has left markets scrambling.

Following Bitcoin’s record high of US$5000 on September 2, China-based media group Caixin released a report suggesting that the country was going to move to ban ICO trading and shut down Bitcoin exchanges.

This announcement was quickly refuted by popular Chinese exchanges Huobi and OKCoin, saying that they had received no orders from the government regarding cryptocurrency exchanges. Others even suggested that the ban would only be temporary while the country figures out how to regulate cryptocurrencies effectively. Regardless, Western media quickly circulated the story, often lacking to mention that no official action had been taken.

The news regurgitated by the West left markets reeling. With generally negative sentiment coming from the media, including the headlines from Marketwatch and Forbes – “Bye, Bitcoin” and “Why China Crushed Bitcoin” respectively – prices have remained suppressed.

Despite the great Chinese FUD debate of 2017, HODL’ers are “buying the dip” and Bitcoin advocates are on their soapbox, sharing the good news that everything that made cryptocurrencies great still exists, with or without China. And one notable Southeast Asian city-state could be poised to pick up the pieces in the ICO world if or when China does actually go through with the ban.

Singapore steps up

Singapore has long since been a favorable location for startups due to its tech-friendly atmosphere, favorable regulatory standards, and supportive tax measures.

Indeed, Singapore has had a positive run with fintech startups including TenX whose token sale raised US$80M, and Golem which raised nearly US$9M. While most companies which have launched ICOs in Singapore have raised between US$1M and US$15M, it is clear that the city has created a system which is desirable for fintech companies.

This sentiment is largely supported by Singapore’s own blockchain ambitions. At the end of May, the Monetary Authority of Singapore (MAS) announced its plan to launch its own “tokenized form of the Singapore Dollar (SGD) on a distributed ledger.”

In “Project Ubin,” the MAS conducted tests with the help of professional services firm Deloitte and distributed ledger consortium R3. The successful trial has since given way to the planning of phase 2 which will involve further research and separate projects to leverage the lessons learned in the previous phase of the experiment.

And in August, the Monetary Authority of Singapore (MAS) rolled out its regulations regarding ICOs.

Echoing the concerns of many other government authorities worldwide, Singapore has expressed that reducing fraud and money laundering are the primary motive behind regulation. Singapore, however, has diverted from SEC rulings in that ICOs within Singapore will not be subjected to the Howey test in order to be identified as securities.

In the official statement from the MAS, it is noted that: “Where digital tokens fall within the definition of securities in the SFA, issuers of such tokens would be required to lodge and register a prospectus with MAS prior to the offer of such tokens, unless exempted. Issuers or intermediaries of such tokens would also be subject to licensing requirements under the SFA and Financial Advisers Act (Cap. 110)”

And those who would like to list their own token should: “seek independent legal advice to ensure they comply with all applicable laws, and consult MAS where appropriate.”

Singapore’s ICO future

While the markets remain weary and the general sentiment surrounding cryptocurrencies seems shaken, Singapore’s actions provide a glimmer of hope for those who intend to launch or invest in ICOs.

With its own digital currency right around the corner, supportive tax policies, appealing regulatory stance and futuristic cityscape, Singapore is laying out promising groundwork which could potentially solidify it as a haven for crowdfunding efforts in the form of ICOs.


Photo by chuttersnap on Unsplash

About The Author

Michael Kern

Texan living in Mexico, new tech enthusiast, decentralization fan, cryptocurrency enthusiast, geopolitical junkie, digi-explorer, and music lover. I believe that we are on the cusp of a new frontier in how we will view the government, money and energy. Let's be a part of it, together.


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