EXCHANGES MAY 24, 2018 13:30 Singapore Warns 8 Crypto Exchanges Against Unauthorized Securities Trading
EXCHANGES MAY 24, 2018 13:30
Singapore Warns 8 Crypto Exchanges Against Unauthorized Securities Trading
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Singapore’s central bank and financial regulator has warned eight crypto exchanges against facilitating the trading of digital tokens deemed as securities and futures contracts without prior approval.
In an announcement today, the Monetary Authority of Singapore (MAS) revealed it had reminded eight unnamed crypto trading platforms to seek its authorization prior to offering any trading of digital tokens that ‘constitute’ securities or digital tokens.
“If the digital tokens constitute securities or futures contracts, the exchanges must immediately cease the trading of such digital tokens until they have been authorized as an approved exchange or recognized market operator by MAS,” the country’s de-facto central bank and watchdog said in a statement.
The measures come at a time when the number of exchange platforms and digital token offerings “has been increasing” in Singapore, MAS capital markets official Lee Bon Ngiap said.
Pointedly, he stressed that the authority wasn’t cracking down on the sector but moving to ensure the industry complies with relevant laws while encouraging legitimate businesses. Flouting the warnings and compliance of laws will see ‘firm action’, he warned.
The central bank official said:
“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 MAS has also put the brakes on an initial coin offering (ICO), cautioning the issuer for breaching the Securities and Futures Act (SFA). The central bank determined that the ICO tokens represented equity ownership of the company and hence classified as a security under law. Further, the investor offering was also conducted without a MAS-registered prospectus, a mandatory requirement.
The ICO issuer has since returned all investor funds and ceased the offering to comply with regulations, the statement added.
Singapore has proved to be somewhat of a safe haven for cryptocurrency exchanges and ICO issuers in the aftermath of China’s comprehensive curbs last year.
In November, the MAS notably issued its ‘Guide to Digital Token Offerings’, bringing clarity and recognition to the radical new form of fundraising powered by cryptocurrencies.
More recently, a senior MAS official revealed the central bank was assessing if “additional regulations are required for investor protection” in the domestic cryptocurrency sector.
BITCOIN ANALYSIS MAY 24, 2018 12:48
Bitcoin Price Drops to $7,300 as Cryptocurrency Market Correction Continues
The bitcoin price has dropped below the $7,300 mark as the valuation of the cryptocurrency market declined by more than $25 billion, from $350 billion to $325 billion over the past 24 hours.
Within the past three days, within merely 72 hours, the valuation of the cryptocurrency market sharply dropped from $390 to $333 billion, losing more than $57 billion. At its previously weekly low, the valuation of the cryptocurrency market dipped to $327 billion. Today, on May 24, the cryptocurrency market fell to a new monthly low.
What is Causing the Market to Drop?
As always, a wide range of factors have contributed to the recent market correction and it is difficult to pinpoint several events as the definitive factors behind the fall of the market. Rather, it as an amalgamation of many events that have occurred throughout the year, which include:
Mt. Gox sell-offPossible manipulation by large-scale traders in the futures marketBitfinex taxation policyBithumb and UPbit scandal in South KoreaFailure of institutional investors to meet the anticipation of the communityRegulatory uncertainty in several regions
But, it is most likely that the launch of the bitcoin futures market in late 2017 and the manipulation of the cryptocurrency market eventually led the market to become extremely volatile and experience large corrections on a regular basis.
The massive sell-off of bitcoin by the Mt. Gox trustee and a series of negative events from South Korea and the US-led investors to lose confidence in the cryptocurrency market in the short-term.
Earlier today, Bloomberg also reported that the US government and the Justice Department launched an investigation into illicit trading and bitcoin price manipulation.
“The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter,” Matt Robinson from Bloomberg reported.
Due to the abnormal volatility in the cryptocurrency market, it is likely that the US government suspects whales and large-scale investors of manipulating the market to drive larger movements on both the upside and downside.