Regulators continue to pressure cryptocurrency exchanges and initial coin offerings. This is only normal, as these new industries present many opportunities but also pose major challenges. The Monetary Authority of Singapore is cracking down on problematic ICOs. So much, in fact, that one particular project was forced to return its funds to Singaporean investors.

Another ICO Goes Awry

Over the past few months, various initial coin offerings have been scrutinized by regulators all over the world. The SEC has been cracking down on illicit projects and trying to bring them to justice. A fair few projects were shut down after violating securities laws. This issue is not unique to just the United States, as other countries have shown increasing signs of concern.

In Singapore, for example, the MAS is bringing a lot of heat to initial coin offerings which potentially violate existing regulations. One project – the name of which was not disclosed – has been shut down, and its team was forced to refund its Singaporean investors. It apparently had violated rules regarding securities and futures contracts.

It’s unknown how much money the ICO in question raised and how much of those funds have been returned to investors. Furthermore, it is a bit unclear whether the company attracted investors from outside of Singapore as well, although that does not appear to have been the case. Any ICO in Singapore needs to consult the MAS prior to issuing digital tokens, which may or may not be considered securities.

Additionally, it seems the MAS is also cracking down on exchanges associated with this particular initial coin offering. A total of eight trading platforms have been warned, and it seems these platforms will be forced to remove the ICO token in question. It is a very uneasy situation, for obvious reasons.

The MAS Assistant Managing Director Lee Boon Ngiap commented:

The number of digital token exchanges and digital token offerings has been increasing. We do not see a need to restrict them if they are bona fide businesses. But if any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action. The public should be aware that there is no regulatory safeguard if they choose to trade on unregulated digital token exchanges or invest in digital tokens that fall outside the remit of MAS’s rules.

This is a reminder that initial coin offering teams need to take the proper legal precautions prior to attempting to raise money. Registering with the government has become a mandatory requirement in a lot of countries, and it seems that situation will only grow more severe over time. Government agencies need to crack down on this particular industry and nip any issues in the bud.