The Monetary Authority of Singapore (MAS) has issued a strict ultimatum to locally incorporated crypto firms: cease all overseas digital token (DT) services by June 30, 2025, or face penalties of up to $200,000 and potential jail terms of up to three years.

The directive, announced in MAS’s response to industry feedback on its proposed Digital Token Service Providers (DTSPs) framework, falls under the Financial Services and Markets Act (FSM Act) of 2022. According to MAS, no transitional period will be granted, and all Singapore-based DTSPs must immediately suspend or stop providing services abroad unless they obtain a valid license.

“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 emphasized in its statement.

Penalties and Rare Licensing

Under Section 137, any business based or incorporated in Singapore is considered to be operating from the country — even if overseas services are not its main focus. Violations will incur fines of up to SGD 250,000 (~$200,000) and up to three years of imprisonment.

MAS clarified that only firms already licensed or exempted under existing frameworks — such as the Securities and Futures Act, Financial Advisers Act, or Payment Services Act — may continue operations without conflicting with the new rules.

However, experts warn that licenses under the new DTSP framework will be extremely limited. Hagen Rooke, a partner at Gibson, Dunn & Crutcher, said in a LinkedIn post that firms operating cross-border crypto services should expect rejection unless they meet exceptionally high AML/CFT standards.

“Licenses will only be granted in rare cases due to inherent regulatory risks,” Rooke noted, urging firms to restructure operations to remove “Singapore touchpoints” and de-risk immediately.

Regulatory Clampdown on Cross-Border Risks

The move marks a significant tightening of Singapore’s stance on crypto oversight. In April 2022, the FSM Act was passed to give MAS broader jurisdiction over Singapore-based companies offering overseas crypto services — especially those seen as exploiting local registration to bypass foreign regulations.

MAS reiterated its concerns about regulatory arbitrage and warned that firms cannot use Singapore as a base while conducting lightly regulated or unregulated operations abroad.

This regulatory push follows MAS’s recent move to block access to Polymarket over gambling concerns, reinforcing Singapore’s effort to mitigate cross-border financial and reputational risks.

With just weeks remaining, local crypto firms targeting international markets must act swiftly to comply — or risk falling afoul of Singapore’s rapidly evolving crypto laws.