New MAS Directive Set to Slash Crypto Presence in Singapore

Singapore is stepping up its crypto oversight in a major way, ordering locally based digital asset firms to suspend all overseas digital token services unless licensed.

The move comes amid escalating concerns over money laundering and terrorism financing risks tied to the borderless nature of crypto transactions — and signals a clear warning to providers exploiting regulatory gray zones.

The Monetary Authority of Singapore (MAS) has initiated a sweeping crackdown on unlicensed crypto operations, giving Digital Token Service Providers (DTSPs) until June 30 to either secure a license or shut down their services.

The order extends even to firms whose overseas token-related activities are not their core business.

MAS stated that the four-week notice period provides sufficient time for DTSPs to begin the licensing process and urged all affected entities to act without delay.

The announcement was issued in response to feedback on an October 2024 consultation paper, which solicited industry views on regulating DTSPs that engage in cross-border operations.

While the policy may appear straightforward, experts warn it could amount to a regulatory minefield. Industry insiders suggest licenses will be granted only under “extremely limited circumstances,” potentially placing many firms in legal jeopardy.

MAS has confirmed the full implementation of Section 137 of the Financial Services and Markets Act (FSM Act), which permits DTSPs to serve both domestic and overseas users—but only if they obtain a valid license from the regulator.

The MAS has made it clear that this is a zero-tolerance policy, warning there will be no form of negotiation or extra time given for firms who continue to operate after June 30.

Companies found violating the laws will be subjected to hefty fines of up to nearly $200,000 and imprisonment of up to three years.

In addition to concerns about financial crime, regulators also flagged the reputational risk to Singapore’s standing if crypto firms are allowed to operate internationally without regulation, solely based on their incorporation in the city-state.

As part of the new requirements, firms must hold at least $185,000 (SGD 250,000) in base capital, re-onboard customers with fresh due diligence, implement the FATF Travel Rule, and meet stringent technology risk compliance standards.

Even independent consultants and freelancers working for foreign crypto companies are not exempt. Depending on the nature of their work, they may be considered to be conducting regulated activities from Singapore and could fall under the same licensing requirements.

Singapore’s latest regulatory stance marks a significant escalation in its oversight of digital asset activity. Under these new directives, DTSPs must cease all unlicensed overseas operations, a measure aimed at minimizing the systemic risks that come with crypto’s cross-border fluidity.

This regulatory tightening is rooted in the FSM Act, passed in April 2022, which expanded MAS’s jurisdiction over crypto companies incorporated in Singapore—even those that serve only international clients.

Under this law, such entities are now legally bound to comply with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) standards, regardless of whether they offer services within Singapore’s borders.

MAS has voiced growing concern over crypto firms exploiting Singapore’s regulatory credibility while operating unchecked abroad. With this move, the regulator has sent a decisive message: the era of regulatory arbitrage is over.