Starting June 30, 2025, Singapore has implemented stringent new regulations targeting digital token service providers (DTSPs) operating within its jurisdiction. Under the updated Financial Services and Markets Act 2022, any company, partnership, or individual incorporated in Singapore that offers digital token services to clients overseas must obtain a DTSP license from the Monetary Authority of Singapore (MAS). Failure to comply will result in severe penalties, including fines up to SGD 250,000 (approximately USD 200,000) and imprisonment for up to three years.
The MAS has made it clear that there will be no grace period or transitional arrangements. Firms that do not secure the required license by the deadline must immediately cease all cross-border digital token activities. This regulation closes a previous loophole that allowed Singapore-based crypto firms to serve international clients without local licensing, thereby aligning Singapore’s crypto market with global anti-money laundering (AML) and counter-terrorism financing (CFT) standards.
To qualify for a DTSP license, applicants must meet strict financial requirements, including maintaining a minimum base capital of SGD 250,000. They must also implement robust AML/CFT controls, conduct customer identity verification, and submit to regular audits. Licensed providers will pay an annual fee of SGD 10,000 and face ongoing regulatory scrutiny.
The MAS has indicated it will be highly selective in granting licenses, citing concerns over the higher money laundering risks associated with certain digital token service models. As a result, many firms may be forced to exit the overseas crypto market or shut down operations entirely if they cannot meet the new standards.
Industry experts view this move as a necessary step to enhance market integrity and investor protection while closing regulatory gaps. However, the abrupt timeline and strict compliance requirements may lead to market consolidation, with smaller players struggling to bear the costs and administrative burden.
In summary, Singapore’s new crypto regulatory framework marks a significant tightening of oversight. Crypto firms based in Singapore must act swiftly to obtain licensing or face substantial fines and potential jail time, underscoring the city-state’s commitment to combating financial crime in the digital asset space.