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While blockchain technology itself is not regulated, the way in which it is used and the products that are offered (based on blockchain technology) may be considered regulated.1
The characteristics of digital tokens determine how they might be interpreted – such as a security like a debenture or share, a unit in a collective investment scheme, or even a derivative. These perspectives could evoke questions if the digital tokens are similar to capital markets products according to the Securities and Futures Act (SFA) and other relevant financial regulations in Singapore. Depending on the characteristics of the digital token, it could be considered as a type of security such as a debenture or share, a unit in a collective investment scheme or a derivatives contract. If the tokens issued in an ICO exhibit such properties that qualify them as securities, collective investment schemes or derivatives contracts under the SFA, it would raise potential financial regulatory concerns under the SFA and other related financial laws in Singapore.1
In addition, digital tokens could be characterized as 'digital payment tokens'. Depending on their nature of use or the services associated with them, these services could be viewed as payment services under the Payment Services Act. Unless a licensing exemption applies, these payment services would need to be licensed under the Payment Services Act.1
Financial institutions that deal in cryptocurrencies and tokens and those that have customers who do so are subject to anti-money laundering (AML) and counter-terrorism financing (CFT) rules. According to the relevant notices and guidelines imposed on financial institutions, they must identify the risks of AML and CFT associated with new products and new business practices, including new delivery mechanisms and emerging technologies that favor anonymity. Since cryptocurrency transactions often involve anonymous transactions, we would expect MAS to require financial institutions to pay particular attention to cryptocurrency-related transactions.1
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