Singapore’s central bank has set a June 30, 2025, deadline for local crypto service providers to halt overseas digital token services unless they obtain a license. Non-compliance could result in fines of up to 250,000 Singapore dollars (approximately $200,000) and imprisonment for up to three years.
The Monetary Authority of Singapore (MAS) issued this directive in response to industry feedback on its proposed regulatory framework for Digital Token Service Providers (DTSPs) under the Financial Services and Markets Act of 2022 (FSM Act). MAS emphasized that no transitional arrangements will be made for local DTSPs providing services abroad. Any Singapore-incorporated company, individual, or partnership offering digital token services outside Singapore must either cease operations or obtain a license by the end of June.
Under Section 137 of the FSM Act, Singapore-based businesses are presumed to be operating from Singapore and are thus subject to licensing, even if their overseas token-related activities are not their primary business activity. Only firms licensed or exempted under existing financial laws—the Securities and Futures Act, Financial Advisers Act, or Payment Services Act—may continue to operate without conflicting with the new rules.
Legal experts suggest that obtaining a license under the new framework will be challenging. Hagen Rooke, a partner at Gibson, Dunn & Crutcher, noted that licenses will be issued only in rare cases due to heightened regulatory concerns around Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT). He advised companies to consider swift action to de-risk through operational restructuring to remove their Singapore touchpoints.
This move signals a significant tightening of regulatory oversight on crypto activity by Singapore’s authorities. The mandate for DTSPs to cease overseas activities stems from regulatory developments aimed at addressing risks in the digital asset sector. In April 2022, Singapore passed the FSM bill, granting MAS greater authority to regulate crypto firms that operate outside the country but are based in Singapore. The law requires DTSPs with overseas operations to comply with AML and CFT standards, even if they do not offer services within Singapore. MAS expressed concerns that crypto firms could exploit regulatory gaps by registering in Singapore while conducting unregulated activities abroad.
