Law. Faith. Justice. Community. Culture.
ByBit Fintech Ltd v Ho Kai Xin and others [2023] SGHC 199
Significant decision: The General Division of the High Court of Singapore (per curiam Philip Jeyaretnam J) has held that crypto assets are things or choses in action, and thus capable of being subject to a trust.
DAO web3.0 blockchain-based (Decentralised / Digital Autonomous Organisations) legal structures and considerations under Singapore law
Legal and other issues with Decentralized Autonomous Organizations or DAOs
In this article, I highlight a few problems with DAOs. The laws make it such that DAOs render members to unlimited liability arising from other members’ actions, DAOs cannot hold property in its own name, DAOs create tax problems for members, DAOs’ voted resolutions may not have legal force, and DAOs may be regulated by investment laws. I consider legal issues with setting up, formation or running of DAOs in Singapore.
I’ve suggested two variations of a CLG model to address some of the legal issues.
Conceptually, DAOs run into the trust problem and the skill problem.
Continue reading “Legal and other issues with DAOs (Decentralised Autonomous Organisations)”
Significance: The Monetary Authority of Singapore (MAS) intends to pass a new omnibus statute to regulate all financial institutions (FIs), including (among others) virtual assets service providers (VASPs) or digital tokens (DT) service provider registered in Singapore but which perform services outside of Singapore.
Significance: new Payment Services Act (“PSA“) by the Monetary Authority of Singapore (“MAS”) was passed by Parliament on 14 January 2019. This new law will replace the Payment Systems (Oversight) Act (Cap. 222A) (“PSOA”) and the Money-Changing and Remittance Businesses Act (Cap. 187) (“MCRBA”).
The proposed new law will apply to:-
a) account issuance service;
b) domestic money transfer service;
c) cross-border money transfer service;
d) merchant acquisition services;
e) e-money issuance service;
f) digital payment token service (cryptocurrencies or virtual currencies);
g) money-changing service.
Continue reading “Legislative Update: MAS Payment Services Act and fintech”
JUST IN. MAS Guide to Digital Token Offerings.
The case studies are very helpful in illustrating MAS’ position on whether certain scenarios fall within regulated activities under the Securities and Futures Act (SFA) or Financial Advisers Act (FAA).
Case study 1: tokens only give access rights to token issuer’s platform and pay for services on the same–not subject to SFA or FAA.
Case study 2: tokens to represent share in company which plans to develop property. Will constitute securities under SFA. Company may need to apply to be licensed financial adviser. Company will need to comply with prospectus requirements.
Case study 3: tokens enable holders to receive profits from company’s investments in a portfolio of shares in companies. Token holders have no powers relating to operations or management. Will constitute collective investment scheme (CIS). Company will need to comply with prospectus requirements, and likely will need to apply for capital markets services (CMS) licence.
Case study 4: token holders receive profits from investment in shares of portfolio of companies. Token issue not available to persons in Singapore. Part XIII of SFA will not apply. But company may be carrying on business of fund management in Singapore and may thus need to apply for CMS licence.
Case study 5: tokens represent loan by investor to startup. Token will be deemed a debenture and thus securities under the SFA. Company facilitating purchase or sale of token may require CMS licence.
Case study 6: company plans to set up virtual currency exchange platform. On the premise that no products regulated under SFA will be traded, SFA will not apply. If any token constitutes securities under SFA, then company may be operating a securities market and thus need to be approved as an exchange by MAS.
