Image Credit: Shutterstock
Key Takeaways
- MAS told Singapore-based digital token service providers to stop overseas operations by June 30, 2025, unless they obtain the required license.
- The regulator said there will be no transitional period for affected firms once the new rules take effect.
- Firms that continue operating without approval could face fines of up to SGD 250,000 and imprisonment of up to three years.
Singapore’s central bank has told local digital token service providers to stop offering overseas services by June 30, 2025, unless they obtain a license under the Financial Services and Markets Act. The Monetary Authority of Singapore (MAS) said it will not provide transitional arrangements for firms caught by the new rules.
MAS Says Overseas Digital Token Services Must Stop or Be Licensed
MAS set out the deadline in its response to feedback on the regulatory framework for digital token service providers (DTSPs). The rules apply to Singapore-incorporated companies, partnerships and individuals that carry on digital token services outside Singapore.
“DTSPs which are subject to licensing requirements under section 137 of the FSM Act must suspend or cease carrying on a business of providing DT services outside Singapore by June 30, 2025,” MAS said.
That means affected firms must either stop the overseas activity or secure the required license before the rules take effect. MAS said it would not provide transitional provisions for local DTSPs operating abroad.
No Transitional Period for Local Crypto Firms
The framework comes under Section 137 of Singapore’s Financial Services and Markets Act 2022. The provision gives MAS authority over Singapore-based digital token businesses that serve overseas markets, even if they do not offer services to customers inside Singapore.
MAS said the rules are meant to address money laundering and terrorism financing risks tied to cross-border digital token activity. The regulator has been concerned that firms could use a Singapore base while conducting unregulated or weakly regulated business overseas.
Firms that fail to comply could face fines of up to SGD 250,000 and imprisonment of up to three years. MAS also clarified that firms already licensed or exempted under other financial laws may continue regulated activities where those laws apply.
Rules Target Cross-Border Crypto Risk
The directive follows Singapore’s broader effort to keep tighter control over digital asset businesses linked to the country. The Financial Services and Markets Act was passed in 2022 to give MAS wider reach over financial services and digital token activities.
Under the framework, local DTSPs that provide services abroad must meet anti-money laundering (AML) and counter-terrorism financing (CFT) standards. MAS has framed the overseas-service rules as a way to prevent regulatory gaps between where a firm is based and where its customers are located.
The rules also make Singapore’s position clearer for crypto companies using the country as a corporate base. A Singapore presence can bring regulatory obligations even when the business model is aimed mainly at foreign users.
Firms Face Restructuring Before Deadline
The June 30 deadline gives affected firms little room to keep operating without a license or exemption. Companies that do not plan to seek approval from MAS may need to remove Singapore touchpoints from their overseas digital token activities.
That could mean changing where entities are incorporated, where management decisions are made or how services are offered to customers outside Singapore. Firms that continue operating after the deadline without meeting the requirements risk enforcement action under the FSM Act.
For Singapore, the message is straightforward. Digital token firms cannot rely on a local base while keeping overseas activity outside MAS supervision.
