This means that unless exempted:  4/6  BIS central bankers' speeches  issuers must comply with prospectus requirements prior to the offer of such tokens; intermediaries dealing in such tokens must meet licensing requirements; and platforms facilitating secondary trading of tokens must be approved or recognised by MAS. With respect to the investors, MAS’ priority has been to make them aware of the risks of putting their money in crypto tokens. We have advised the public to act with extreme caution should they wish to invest in crypto tokens. They could lose their shirts if prices plunge. And they have no regulatory protection if there is fraud. Market functioning There is also the issue of market integrity and functioning. Several cryptocurrency exchanges abroad have suffered cyber attacks and theft of their crypto tokens. There are also rumours and reports of rampant market manipulation and other fraudulent activities on crypto-exchanges. We are watching with interest developments in the US, where futures contracts based on crypto tokens have been introduced on regulated exchanges. There may be some advantages here from a market integrity perspective. These exchanges have clear rules governing trade and post-trade activities. Such products could also potentially have a stabilising influence on crypto token prices as they provide two-way hedging opportunities for investors. But regulation cannot address all the concerns around crypto tokens. The industry too has a part to play in strengthening the ecosystem, for instance, by adopting best practices around transparency, cybersecurity, and record-keeping.
Guarding against Gresham’s Law I have spoken about the good, bad, and ugly of crypto tokens. To be more exact, it is the uses of crypto tokens that assume these qualities. Like Money, crypto tokens can a force for good or bad. Lest we forget, money is not the root of all evil; it is the love of money that is so. The same applies to crypto tokens – it is the enchantment with these tokens as a way to make a quick buck and their abuse for illicit activities that are at the root of our concerns. There is an old axiom in economics called Gresham’s Law, which is loosely interpreted as “bad money drives out good”. We must work together – regulators and the crypto industry – to make sure that bad money does not take hold. And that a new generation of crypto tokens emerges, that harnesses the potential of blockchain technology for social good while mitigating the risks today’s tokens pose. This is a future worth securing and I hope that some of the talents gathered in this hall will help to make it happen. Thank you. 5/6  BIS central bankers' speeches  6/6  BIS central bankers' speeches