Break Singapore’s new crypto rules and you could face $200K fine or jail

Singapore crypto regulations and the June 30 deadline

The Monetary Authority of Singapore (MAS) has delivered a clear mandate that all Singapore-based entities offering digital token services to overseas clients must obtain a DTSP licence or halt cross-border operations immediately.

As of June 30, 2025, any entity incorporated in Singapore — whether a company, partnership, or individual — that provides digital token services to overseas clients must either:

• Obtain a Digital Token Service Provider (DTSP) licence under the Financial Services and Markets (FSM) Act 2022, or
• Immediately cease operations involving foreign markets.

This directive leaves no room for interpretation. MAS has stated explicitly that there will be no grace period, no transitional arrangements and no extensions. 

Any entity falling within the scope of these new rules must comply or shut down cross-border digital asset activity.

Importantly, these restrictions apply regardless of the scale of overseas business activity. Even firms for whom foreign clients represent only a small fraction of revenue are affected. MAS is closing off a key regulatory gap that allowed Singapore-based crypto companies to serve global users while avoiding stricter rules in other jurisdictions.

Did you know? MAS mandates a minimum base capital of SGD 250,000 for DTSP applications (even for partnerships or individuals), which users must maintain as a cash deposit or capital contribution.

Who qualifies as a digital token service provider under Singapore’s new law?

Singapore’s new rules broadly define DTSPs to include any entity offering token-related services abroad, regardless of size, structure or direct user involvement.

According to Section 137 of the FSM Act, a Digital Token Service Provider (DTSP) includes any person or business engaged in:

• The transfer of digital payment tokens.
• The exchange between digital tokens and fiat or other tokens.
• The custody of tokens on behalf of others.
• The promotion of any token-related service.

MAS has intentionally drawn the definition wide. It encompasses centralized crypto exchanges, DeFi platforms, wallet providers, token issuers and even non-crypto firms if they offer token-related services to clients outside Singapore.

This means that a Singapore-based startup running a marketing campaign for a foreign crypto project may still be considered a DTSP, even if they don’t touch user funds directly. 

The regulatory lens focuses on the place of incorporation, not where servers are located or where the end-user resides.

MAS has emphasized that the business model or revenue size does not exempt compliance. Even small-scale players, part-time projects or side ventures tied to crypto fall under the mandate. 

The agency has explicitly warned that it will take enforcement action against any DTSP that has not registered or exited overseas operations by the June deadline.

Did you know? Pure utility or governance token providers are exempted from DTSP licensing, unlike exchanges or custodial businesses involved with payment tokens.

MAS crypto deadline 2025

Despite industry lobbying, the MAS has refused all requests for phased implementation.

Crypto service providers and industry groups had urged the regulator to allow for a transition window, a temporary exemption process or at least a fast-track licence application. 

Many argued that the abrupt timeline — less than a month in many cases — gave insufficient time to restructure or unwind services.

MAS dismissed these concerns, stating that allowing token services to continue during a transition would expose the market to unacceptable risks, particularly related to financial crime.

As a result, the regulatory update amounts to a compliance cliff. Firms must either:

• Exit the overseas crypto market entirely, or
• Complete the licensing process before June 30.

There will be no exceptions. 

Singapore $200K crypto fine and prison risks

Violating the June 30 deadline is a criminal offense under Singapore law.

Firms that continue operating as DTSPs for overseas clients without a valid licence will be in breach of Section 137 of the FSM Act and face:

• Fines of up to SGD 250,000 (approximately USD 200,000), and
• Imprisonment for up to three years.

MAS has stressed that these penalties will be applied regardless of the size of the business or the scope of the violation. 

This elevates the decision from a business compliance issue to a legal survival question. Either you’re fully licensed, or you’re in violation. Also, because MAS is expected to grant licences only sparingly, citing ongoing AML/CFT concerns, many firms may not qualify.

Singapore imposes de facto ban on new crypto licences amid AML concerns

While MAS has not officially suspended licensing, it has made clear that approvals for Digital Token Service Providers (DTSPs) will be extremely rare. 

In a June 6, 2025 announcement, the Monetary Authority of Singapore stated that licences would only be issued in “extremely limited circumstances,” due to unresolved Anti–Money Laundering (AML) and Counter–Terrorism Financing (CFT) concerns.

MAS made its position unambiguous: The bar for licensing is now intentionally high. A spokesperson confirmed that MAS “will generally not issue a licence” given the inherent difficulty of regulating offshore token services and the related crypto legal risks in 2025.

This effectively imposes a de facto licensing ban. Unless a crypto company in Singapore has both elite compliance infrastructure and a strong operational justification, it is unlikely to receive regulatory approval. The crypto licensing challenges now facing firms in the city-state are among the most stringent in the world.

MAS crypto compliance rules: Why the clampdown?

Singapore’s regulatory crackdown stems from a central concern: regulatory arbitrage. 

MAS has long feared that crypto companies would register in Singapore, gaining reputational legitimacy from its financial ecosystem, while serving overseas clients under weaker or no regulatory oversight.

This loophole allowed firms to market themselves as MAS-compliant without being subject to crypto service provider compliance in the countries where they operate. 

To combat this, the Financial Services and Markets Act 2022 gave MAS direct oversight of cross-border digital token activity, via Section 137. This legal mechanism empowers the authority to impose full compliance requirements, regardless of where users, servers, or funds are located.

MAS is aiming to protect Singapore’s standing as a trusted financial hub. 

Did you know? MAS issued its licensing requirement only four weeks before its enforcement. 

Broader implications of Singapore crypto regulations

The immediate impact of MAS’s policy shift is already visible. 

One of the most high-profile cases is WazirX, a crypto exchange previously registered in Singapore but primarily serving users in India. After a Singapore court blocked its restructuring, the company relocated operations to Panama. Its parent firm was restructured under Zensui, a new entity based outside Singapore.

A growing number of crypto firms are restructuring or relocating to offshore jurisdictions such as Panama, Hong Kong and Dubai, all seen as more permissive environments for digital asset businesses. 

Industry giants like Bybit and Bitget have started withdrawing teams from Singapore, citing licensing uncertainty and MAS crypto compliance rules as core obstacles.

This trend is dubbed a “crypto exodus,” as companies seek jurisdictions with more flexible frameworks. 

Meanwhile, neighboring countries like Thailand are experimenting with more accessible crypto policies, allowing retail usage like credit card-based crypto spending for tourists, while the Philippines is moving to enhance crypto licensing and AML oversight.