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Kristina Frunze

11 August 2017

Regulation Forex

Singapore regulator MAS warns consumers about six ICO tokens risks


Singapore authorities advise consumers to be mindful of potential ICO tokens risks. The regulator MAS has identified 6 key risks you need to know about.

11 August, AtoZForex The Monetary Authority of Singapore (MAS) has issued another announcement in regards to its stance on ICO tokens. The previous circular by MAS has been issued on the 1st August. That time, the regulator has made it clear that its position towards ICO tokens reflects the one of the US Securities and Exchanges Commission.

Singapore regulator MAS warns consumers about six ICO tokens risks

In its latest ICO tokens related announcement, the MAS has advised users to “exercise due diligence.” Specifically, The official announcement from the Singapore regulator states:

“Consumers should make it a point to understand the product. Where sellers of digital tokens fail to highlight the risks, consumers should make the effort to find out more information about the underlying project, business or assets.”

The watchdog has also outlined six key risks that are relevant to ICO tokens. The MAS stated consumers should pay close attention to these risks. Among the identified risks are:

  1. Risks relating to foreign and online operators
  2. Sellers without a proven track record related risks
  3. Risks relating to insufficient secondary market liquidity
  4. Highly speculative investments linked risks
  5. Risks relating to investments promising high returns
  6. Risks of money laundering and terrorist financing

You can find more details about the risks here.

What do you need to do before investing in ICOs?

The Singapore regulator further adds:

“The CAD (Commercial Affairs Department) and the MAS advise consumers to be mindful of potential risks of digital token and virtual currency-related investment schemes.”

In accordance with the previous announcement, the Singapore regulator does not warn about any blanket limitations for tokens. It highlights that a case-to-case basis will be used to determine the nature of the token.

Following on this, the Singapore financial regulator has outlined the things, which consumers should do before making any investment decision. Please see the screenshot below.

ICO tokens risks

Meanwhile, the market participants express mixed feelings in regards to the SEC statements. Some seem not that concerned with the regulatory decisions, while others appear shocked and surprised.

Think we missed something? Let us know in the comments section below.


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