Singapore is drawing a hard line in the sand for cryptocurrency businesses. Under sweeping new rules taking effect June 30, 2025, any Singapore-based firm offering digital token services to overseas clients must obtain a licence or cease operations immediately. Violators face stiff penalties, including fines of up to SGD 250,000 (approximately USD 200,000) and up to three years in prison.
The directive, issued by the Monetary Authority of Singapore (MAS), applies to all entities incorporated in the country, whether companies, partnerships, or individuals engaged in digital token activities beyond Singapore’s borders. Crucially, the mandate comes with no grace period, no transitional framework, and no room for negotiation.
“MAS has been explicit: there will be no extensions,” the regulator said in its announcement. “Entities must either comply fully or shut down cross-border activity.”
Who’s Affected: Broad Definition Targets Entire Industry
The definition of a Digital Token Service Provider (DTSP) under Section 137 of the Financial Services and Markets (FSM) Act 2022 is expansive. It includes anyone involved in transferring digital tokens, exchanging tokens with fiat or other tokens, custodying assets on behalf of others, or even promoting token-related services.
That means not only crypto exchanges and DeFi platforms, but also wallet providers, token issuers, marketing agencies, and even non-crypto companies offering token-linked products could fall under the law. The scope is sweeping: a small Singapore-based marketing firm running an overseas campaign for a token launch might be deemed a DTSP even if it never holds client funds.
“This is about where the company is incorporated, not where the servers are or where users live,” MAS clarified. Compliance is mandatory regardless of company size or the percentage of revenue derived from foreign clients.
Licencing Comes with High Barriers
Applying for a DTSP licence isn’t a casual process. Applicants must meet a minimum capital requirement of SGD 250,000, which must be maintained either as a cash deposit or equity contribution. That applies even to individual operators and partnerships.
Adding to the challenge, MAS has stated that approvals will be rare. In a June 6 announcement, the regulator said it would issue licences only in “extremely limited circumstances,” citing unresolved anti–money laundering (AML) and counter-terrorism financing (CFT) risks.
“We will generally not issue a licence,” an MAS spokesperson said, acknowledging that the bar has been raised significantly.
This effectively amounts to a de facto ban, say industry watchers. Unless a firm has elite compliance infrastructure and a compelling reason to operate overseas, its chances of securing approval are slim.
Industry Pushback Falls Flat
Despite lobbying from crypto companies and industry groups, MAS has refused to delay the implementation or provide a transitional period. Many firms complained the four-week notice period was unworkable, especially for businesses needing to wind down operations or pivot quickly.
But MAS stood firm, arguing that continued operation without full compliance exposes the market to unacceptable risks.
“Allowing token services to continue during a transition would leave a regulatory gap open to abuse,” the agency said.
Legal Consequences for Noncompliance
Under Section 137 of the FSM Act, operating as an unlicensed DTSP is a criminal offence. The consequences are severe: companies or individuals found in violation face fines of up to SGD 250,000 and jail terms of up to three years. These penalties apply regardless of the company’s size, revenue, or intent.
The sudden regulatory shift has turned what was once a business risk into a legal liability. For many firms, the only options are to apply for the rare licence or exit Singapore’s crypto scene altogether.
A Crypto Exodus Begins
The ripple effects are already being felt. Indian crypto exchange WazirX, once registered in Singapore, relocated its operations to Panama after a Singapore court blocked its restructuring plan. Parent company operations were restructured under Zensui, a new offshore entity.
Larger platforms such as Bybit and Bitget have begun withdrawing staff from Singapore, citing licencing uncertainty and regulatory pressure.
The migration trend dubbed the “crypto exodus” has pushed firms to more permissive jurisdictions such as Panama, Hong Kong, and Dubai. Meanwhile, regional competitors like Thailand and the Philippines are actively refining their crypto frameworks, aiming to attract business from firms spooked by Singapore’s crackdown.
Singapore Defends Its Reputation
For MAS, the crackdown is about more than policy; it’s about preserving Singapore’s position as a trusted financial hub.
The regulator has long expressed concern that crypto firms were using Singapore as a regulatory haven, incorporating locally for reputational advantage while evading stricter compliance overseas.
By asserting direct oversight over all token-related activity conducted by Singapore-based entities, MAS hopes to close this loophole once and for all.
The message is clear: In the eyes of Singapore’s financial watchdog, credibility requires control, and crypto firms that aren’t prepared to meet the standard may need to look elsewhere.
