The Monetary Authority of Singapore (MAS) has recently halted a security token offering (STO) for a security breach, according to its announcement on Jan 24.
The issuer in question reportedly failed to fully comply with regulatory requirements under the Securities and Futures Act (SFA). Accordingly, an issuer who makes an offer of securities to accredited investors without registering a prospectus with MAS, must be subject to the advertising restriction.
The legal advisers of the project allegedly attempted to advertise the offer on Linkedln. As such, the issuer cannot rely on the exemption from prospectus registration.
MAS reminded that “the offer of securities tokens must comply with all applicable securities laws including the requirement to register a prospectus with MAS. Issuers who intend to rely on the prospectus exemptions under the SFA should note that these exemptions are subject to conditions, including advertising restrictions.”
Mr Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, explained that the requirement of a prospectus is to ensure all the information is provided to make informed investment decisions.
“Some offers may be made without a prospectus if they are limited to a restricted group of persons or to those who have the means to look after their own interests. Such offers are subject to strict conditions such as advertising restrictions. MAS will not hesitate to act if issuers contravene the disclosure requirements under the SFA.” added Lee Boon Ngiap.
Following the MAS’ warning, the issuer has suspended its global offering of securities tokens.