Singapore’s central bank has issued a directive requiring local crypto firms to cease offering services to overseas markets by June 30, or face steep penalties — including fines of up to $200,000.
The Monetary Authority of Singapore (MAS) announced the deadline in its response to industry feedback on the proposed regulatory framework for Digital Token Service Providers (DTSPs) under the Financial Services and Markets Act of 2022 (FSM Act).
MAS made clear there will be no transitional arrangements. Any company, partnership, or individual incorporated in Singapore and providing digital token (DT) services abroad must either stop operations or obtain a license once the DTSP provisions come into force at the end of June 2025.
“DTSPs which are subject to a licensing requirement under section 137 of the FSM Act must suspend or cease carrying on a business of providing DT services outside Singapore by 30 June 2025,” MAS stated.
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Violations Could Bring Fines and Jail Time
Under Section 137, Singapore-based entities are presumed to operate from Singapore – even if their overseas DT activities are not their main business. As such, they fall under local licensing requirements.
Failure to comply could lead to fines of up to 250,000 Singapore dollars (around $200,000) and up to three years in prison.
Only firms already licensed or exempt under existing legislation – such as the Securities and Futures Act, Financial Advisers Act, or Payment Services Act – can continue operations without violating the new rules.
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Licenses Will Be Rarely Granted
Even though licensing is technically possible, legal experts suggest approvals will be rare. In a LinkedIn post, Hagen Rooke, a Partner at Gibson, Dunn & Crutcher, said MAS is unlikely to grant licenses except in exceptional cases due to elevated Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) concerns.
“The MAS will grant licences under the new framework only in extremely limited circumstances (as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related),” Rooke wrote.
He advised companies to take immediate steps to de-risk through operational restructuring to remove their Singapore nexus.
A Push to Manage Cross-Border Risk
The move marks a significant tightening of regulatory oversight. It aligns with Singapore’s broader efforts to close regulatory loopholes that allow crypto firms to operate abroad while being based locally.
The FSM Act, passed in April 2022, granted MAS the authority to regulate crypto firms incorporated in Singapore but conducting activities outside its borders. It requires such firms to adhere to AML and CFT standards, even if they do not serve local customers.
MAS said it is concerned that some firms may use Singapore’s reputation to engage in unregulated overseas activities, posing cross-border financial risks.
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