Singapore’s crypto crackdown could force startups to shut down overnight
Singapore has introduced new rules targeting unlicensed crypto firms operating from its jurisdiction but serving overseas markets, signalling one of the most stringent regulatory crackdowns in the global digital asset space.
The new directive from the Monetary Authority of Singapore (MAS), any Singapore-based entity offering digital token services to foreign clients must obtain a Digital Token Service Provider (DTSP) licence under the Financial Services and Markets Act 2022 by June 30, 2025, or cease all such operations immediately.
MAS has ruled out grace periods or transitional arrangements as it states that failure to comply will be treated as a criminal offence, punishable by fines of up to SGD 250,000 (USD 200,000) and up to three years' imprisonment under Section 137 of the Act.
The measure closes a regulatory loophole that allowed firms to operate globally from Singapore without being licensed locally. According to MAS, the move aims to prevent regulatory arbitrage and protect Singapore’s reputation as a tightly regulated financial hub.
Experts say the law now applies regardless of company size, structure, or customer base, affecting crypto exchanges, wallet providers, DeFi projects, token issuers, and even marketing firms promoting token services abroad. Simply being incorporated in Singapore is sufficient to trigger licensing obligations, even if user activity is hosted elsewhere.
“This is not about scale; if you're offering digital token services from Singapore to any foreign market, you must comply or shut down,” said fintech lawyer Mike Chiam.
MAS has approved 33 digital payment token licences, including for major players like Coinbase and OKX. But it has also made clear that future licences will be granted only in exceptional cases, citing persistent anti-money laundering (AML) and counter-terrorism financing (CFT) concerns.
Smaller players, which lack the legal and compliance infrastructure of larger firms, face high compliance costs or total shutdown.
MAS's uncompromising stance comes as part of a broader global effort to regulate crypto markets, aligning with standards from the Financial Action Task Force (FATF).
The authority has said it will not allow its jurisdiction to be used as a regulatory shelter for crypto businesses operating without oversight elsewhere.
While some in the industry argue that the abrupt deadline offers little time for restructuring, MAS insists that the law has been communicated since April 2022, when the FSM Act was passed.
A June 6, 2025, statement reiterated that the time for transition has ended.
This story is written and edited by the Global South World team, you can contact us here.
