Source of article: The Straits Times

Writer credits: Claire Huang

I shared my views with the Singapore Straits Times in the attached story published on 16 June 2023.

In Summary:

The United States SEC alleges that the XRP cryptos sold to the public by Ripple were securities which were not registered for public offering. A win against Ripple will have far-reaching implications in the broader crypto market. A cardinal issue in the law suit is whether an investment in XRP constitutes a contract where profits are “derived from the efforts of others” based on a 1946 US Supreme Court decision in SEC v. Howey. This is arguably a grey area at the present moment due to the decentralised nature of cryptocurrencies. A win against Ripple is likely to open a floodgate of law suits against many crypto issuers and corresponding enforcement actions against their key executives.
 
The applicable laws in Singapore under the Securities & Futures Act (“SFA”) are similar in principle to the US laws under the Securities Act of 1933 and the Securities Exchange Act of 1934. If a token is deemed to be a form of securities or a unit in a collective investment scheme under Singapore’s SFA, any public offering would require prospectus registration with the MAS and complying with the requisite public disclosures. If the International Organisation of Securities Commissions (”IOSCO”)  adopts a set of principles and standards as to whether a crypto constitutes a form of securities requiring prospectus registration, it can be envisaged that the Singapore market regulator will adopt similar principles and policies towards any public issue of cryptos. This would be irrespective of the final outcome of the Ripple case. A US Supreme Court decision on the Ripple case may be persuasive but not legally binding in the interpretation of the securities laws in Singapore. Express legislative amendments have to be made to the SFA to adopt applicable principles that may be pronounced by the US Supreme Court.

My LinkedIn post can be referenced here