Singapore Orders Crypto Firms to Obtain Licence or Cease Overseas Operations by June 2025

The Monetary Authority of Singapore (MAS) has issued a stern directive to all Singapore-based entities offering digital token services to overseas clients. These entities must obtain a Digital Token Service Provider (DTSP) licence under the Financial Services and Markets (FSM) Act 2022 by June 30, 2025, or cease all cross-border operations immediately. This mandate leaves no room for interpretation, with MAS explicitly stating that there will be no grace period, transitional arrangements, or extensions. The directive applies to all entities, regardless of the scale of their overseas business activity, aiming to close a regulatory gap that allowed Singapore-based crypto companies to serve global users while avoiding stricter rules in other jurisdictions.

Under the new rules, a DTSP is broadly defined to include any entity offering token-related services abroad, regardless of size, structure, or direct user involvement. This 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. The regulatory focus is 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, and enforcement action will be taken against any DTSP that has not registered or exited overseas operations by the June deadline.

Despite industry lobbying, MAS has refused all requests for phased implementation, dismissing concerns that the abrupt timeline gave insufficient time to restructure or unwind services. The regulatory update amounts to a compliance cliff, with firms having to either exit the overseas crypto market entirely or complete the licensing process before June 30. Violating the June 30 deadline is a criminal offense under Singapore law, with firms facing fines of up to SGD 250,000 (approximately USD 200,000) and imprisonment for up to three years. This elevates the decision from a business compliance issue to a legal survival question, as MAS is expected to grant licences only sparingly, citing ongoing AML/CFT concerns.

While MAS has not officially suspended licensing, it has made clear that approvals for DTSPs will be extremely rare. The bar for licensing is now intentionally high, with a spokesperson confirming that MAS “will generally not issue a licence” given the inherent difficulty of regulating offshore token services and the related crypto legal risks. This effectively imposes a de facto licensing ban, with crypto companies in Singapore facing some of the most stringent licensing challenges in the world. The 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.

The immediate impact of MAS’s policy shift is already visible, with a growing number of crypto firms restructuring or relocating to offshore jurisdictions such as Panama, China 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 are experimenting with more accessible crypto policies, allowing retail usage like credit card-based crypto spending for tourists, while others are moving to enhance crypto licensing and AML oversight.