This blog series has been named after the classic children’s categorisation game where one player names an object and the other player has to categorise it as an animal, vegetable or mineral. Whilst simple in concept, the difficulty of the game varies – some things are extremely easy to categorise (such as ‘cat’), whereas others are difficult to categorise, or might have features meaning that different people could categorise them in different ways (is ‘coal’ better categorised as fossilised vegetable matter or a mineral?).

As with that game, the difficulty of categorisation of tokens can vary greatly depending on their features and in this series we’ll look at some of the ways in which Singapore law seeks to do so.


Tokens can be categorised as securities for purposes of the Securities and Futures Act (SFA). The SFA regulates institutions and activities in the securities and derivatives industry, including the conduct of regulated activities (such as dealing in capital markets products and fund management) and the operation of organized markets.

Initial Token Offerings (or Initial Coin Offerings) started growing in popularity around 2017 in Singapore. At that time tokens were generally categorised as ‘security tokens’ or as ‘utility tokens’. Security tokens were commonly understood to be tokens which fell within the existing and established regulations governing securities and other capital markets products under the SFA whereas utility tokens on the other hand were tokens which only granted its holders the right to access certain services provided by the token-issuer (and as such did not fall within the ambit of the SFA and on its platforms.

Tokens (however labelled) may be characterised (and therefore regulated) as securities such as shares, units of a business trust or debentures, if the tokens confer a right of ownership interest in a corporation or business trust, or evidence the indebtedness of the issuer in respect of monies lent to the issuer by the token holder.

Offers of tokens which constitute securities are subject to various requirements including the preparation of a prospectus in accordance with the SFA unless an applicable exemption is available. Dealing in tokens which constitute securities is a regulated activity under the SFA for which a licence is needed. Persons intending to deal in securities, or intermediaries facilitating offers or issues of securities, would be subject to applicable licensing and business conduct requirements under the SFA.


Coming soon…


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