ICO is a type of fundraising that relies heavily on DLT technology. Unlike IPO which involves issuing shares in exchange for fiat currencies, ICO relies on the issuance of tokens which are then exchanged for cryptocurrencies (e.g. Bitcoin or Ether). ICO is a quite popular way of attracting funds in South East Asia - one of the fastest growing blockchain markets in the world. So, let’s take a look at what it takes to register a company for ICO in Singapore.
Launching an ICO in Singapore requires issuers to come up with the so-called "white paper", an analogue of a prospectus that companies must prepare to be able to offer securities on the Singapore Stock Exchange.
As said above, registering a company for crypto activities in Singapore requires entrepreneurs to come up with the so-called ‘white paper’. Containing information on the nature of a service or product, resources required & funds necessary to develop a service or product, the white paper normally describes the minimum & maximum number of tokens issuers intend to issue, including rights the tokens provide their holders with. However, unlike a prospectus, it places no requirements on the issuer, which can lead many people to mistakenly believe that ICOs in Singapore are completely unregulated.
Singapore: ICO Regulation
Why is starting a cryptocurrency business in Singapore such an attractive proposition for domestic & foreign investors? The first & foremost reason for that is, of course, the lack of regulatory barriers. However, the non-existence of a specific regulatory framework for ICOs in Singapore doesn’t necessarily mean that all ICOs in Singapore go unregulated.
2017 saw MAS, Singapore’s number one financial regular, publish its guidelines on digital tokens, detailing its recommendations for the offer of e-money. Under the guidelines, launching an ICO in Singapore requires having no minimum share capital, providing it’s based on utility tokens. That said, launching an STO in Singapore does require meeting minimum share capital requirements (at least one hundred thousand Singapore dollars). Digital currencies performing functions that aren’t covered by the common regulatory regime may be subject to regulation by Singapore’s AML legislation.
The rise of ICOs in Singapore has been largely fueled by the development of blockchain-powered currencies, such as Ethereum. Their main advantage lies in the fact that anyone can create secondary digital tokens & exchange them for the primary currency - Ether. Platforms trading in Ether have a public sale function that allows users to conduct an ICO in Singapore quickly & easily.
Launching an ICO in Singapore is a pretty straightforward process which is made even easier due to the lack of any formidable regulatory mechanisms. However, potential issuers may run into some unexpected legal hurdles and have a hard time extricating themselves from this predicament. They can prevent that from happening by seeking assistance from highly qualified legal advisors, such as the ones working at IQ Decision UK. They'll be happy to help them obtain a license for crypto activities in Singapore & assist with any other legal challenges they may encounter in that regard.