Singapore’s central bank has set a deadline of June. 30 for local crypto providers to stop offering digital token services to overseas customers.
The Monetary Authority of Singapore (MAS) issued the directive in response to industry feedback on its proposed regulations for Digital Token Service Providers (DSTPs) under the Financial Services and Markets Act of 2022.
MAS said no transitional arrangements will be made for local DTSPs offering services abroad. Any Singapore-registered company, individual, or partnership providing digital token services outside Singapore must either stop operating or get a license when the DTSP rules take effect at the end of June. MAS wrote:
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.
Singapore-based crypto firms risk $200K penalties
Under Section 137 of the FSM Act, authorities assume Singapore-based businesses operate locally and require the necessary licenses. This applies even if their token-related activities abroad aren’t their main business.
Companies that violate the law may face hefty fines of up to 250,000 Singapore dollars ($200,000) and imprisonment for up to three years.
Meanwhile, MAS said only companies licensed or exempt under current financial laws, like the Securities and Futures Act, Financial Advisers Act, or Payment Services Act can continue operating without violating the new rules.
A lawyer said that licensing DTSPs will happen only in rare cases. In a LinkedIn post, Hagen Rooke, a partner at Gibson, Dunn & Crutcher, explained that regulators will issue licenses only in rare cases due to increased concerns around counter-terrorism financing and anti-money laundering.
Furthermore, the lawyer urged companies to consider quickly reducing risk by restructuring their operations and removing their connections to Singapore.
