- Firms in Singapore without licenses must stop global crypto services by June 30.
- Unlicensed firms must wind down or apply for a license within 4 weeks of the notice.
- Remote workers employed by foreign cryptocurrency firms also fall under the MAS’s jurisdiction.
The Monetary Authority of Singapore (MAS) has mandated that all digital token service providers (DTSPs) operating from Singapore without a valid license must stop providing services to clients outside the country by June 30, 2025. This rule will be enforced without any grace period or transitional phase, as outlined in Section 137 of the Financial Services and Markets Act (FSMA). It applies to all entities, either incorporated in Singapore or operating from a Singapore-based office, even if their clients are exclusively overseas.
The directive follows concerns raised by MAS regarding the potential misuse of digital token services for money laundering and terrorist financing, particularly where service providers are based in the country but direct their operations toward overseas markets that lack robust regulatory frameworks. Consequently, MAS emphasized that service providers pose heightened risks when they are not locally regulated but still operate under Singapore’s jurisdiction, thereby potentially impacting the country’s global reputation.
MAS provided DTSPs with a four-week commencement notice during which the affected firms must either wind down their services or apply for a DTSP license. The regulator stated clearly that all entities failing to comply by the June 30 deadline will face penalties under section 137(6) of the FSM Act. These include not just companies but also individuals, general partnerships, and limited liability partnerships offering digital token services from Singapore.
Strict Licensing Conditions and No Transitional Window Offered
MAS clarified that it will grant licenses only under “extremely limited circumstances,” especially where firms do not serve customers in Singapore and are regulated in jurisdictions with equivalent standards.
Additionally, applicants must operate from a physical business location within Singapore, hold a minimum base capital of SGD 250,000, and appoint a qualified senior-level compliance officer. They must also establish strong internal frameworks for anti-money laundering, counter-financing of terrorism, cyber hygiene, and technology risk management.
MAS rejected public calls for a transitional period for firms applying for a license, asserting that a four-week notice is sufficient and necessary to curb immediate risk. The regulator also noted that allowing firms to operate without a license during this interim would undermine the objectives of the FSM Act.
Related: Crypto Awareness in Singapore Hits 94%, But Ownership Dips
Will Crypto Firms Be Able to Comply in Time?
The directive extends even to employees working remotely in Singapore for foreign crypto firms, unless it is demonstrated that the foreign company does not operate from Singapore under the FSM guidelines. MAS confirmed that all firms, including individuals working under informal structures, must comply or exit the market entirely.
As MAS adopts international crypto rules, the pressure on crypto businesses increases. Are the tough rules and guidelines easy for service providers to comply with before the deadline, or will some companies be forced to exit cross-border services?
