Spackman in tie-up to offer K Coin utility tokens

Catalist-listed Spackman Entertainment Group has inked a deal with a partner in its planned initial coin offering (ICO), it said yesterday.

The tie-up with South Korean cryptocurrency developer Project Talent aims to launch utility tokens, dubbed "K Coins", which can be used to access Spackman products and services such as merchandise and concerts.

Under the proposed partnership with Spackman, Project Talent - which has ties to Singapore-based cryptocurrency exchange Kyber Network - will develop both the platform and tokens for K Coins.

Mr Richard Lee, Spackman's executive director and interim chief executive, said in a statement that the deal "shall enable us to leverage blockchain technology and the group's content and talent management platform" for a cryptocurrency in the South Korean entertainment industry.

Spackman said in February that it intended to offer K Coins through an ICO.

It said it would seek legal advice to ensure the fund-raising round complied with all Singapore rules, including laws on money laundering and terrorism financing.

The company is eyeing utility tokens, which are used to purchase goods or services, rather than security tokens, which are more closely related to tradable assets.

Cryptocurrencies refer to digital currencies based on encryption techniques, and which are not backed by fiat money or regulated by a central bank.

Monetary regulators worldwide have put cryptocurrencies under tougher scrutiny amid concerns such as price instability, vulnerability to hacking theft, and the illicit potential for money laundering and terrorism financing.

Monetary Authority of Singapore (MAS) managing director Ravi Menon said recently that the central bank has so far chosen not to regulate such tokens directly but will monitor developments.

"MAS assesses that the nature and scale of crypto token activities in Singapore do not currently pose a significant risk to financial stability. But this situation could change, and so we are closely watching this space," he told a payments conference last month.

A version of this article appeared in the print edition of The Straits Times on April 12, 2018, with the headline 'Spackman in tie-up to offer K Coin utility tokens'. Print Edition | Subscribe