Singapore Sets June 30 Deadline for Local Crypto Firms to End Overseas Digital Token Services
Singapore’s central bank, the Monetary Authority of Singapore (MAS), has issued a firm deadline for all locally based crypto service providers to stop offering Digital Token (DT) services to foreign markets by June 30, 2025. This directive is part of MAS’s broader effort to enhance regulatory oversight of Digital Token Service Providers (DTSPs) under the Financial Services and Markets Act 2022 (FSM Act).
MAS Clarifies No Transition Period for Overseas Crypto Services
In its official response to industry feedback on the proposed regulatory framework, MAS confirmed that there will be no transitional arrangements for Singapore-based DTSPs conducting business abroad. This means that any Singapore-incorporated entity, partnership, or individual involved in DT services outside the country must either cease operations or secure a valid license before the DTSP provisions take effect at the end of June.
According to MAS, firms falling under Section 137 of the FSM Act must suspend or terminate all foreign DT-related services by the deadline. “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,” MAS stated.
Heavy Penalties for Non-Compliance
Under the FSM Act, any crypto-related firm based in Singapore is presumed to be operating locally and is subject to licensing, even if its overseas token operations are not the core of its business. Non-compliant businesses could face financial penalties of up to SGD 250,000 (approximately USD 200,000) and imprisonment of up to three years.
Only companies currently licensed or exempted under Singapore’s existing financial legislation — including the Securities and Futures Act, Financial Advisers Act, and Payment Services Act — may continue operations without breaching the new DTSP provisions.
Licensing Likely in Rare Cases Only
While the new framework technically allows for licensing, experts say approvals will be granted sparingly. In a LinkedIn analysis, Hagen Rooke, a Partner at Gibson, Dunn & Crutcher, noted that licenses under the updated DTSP rules will likely be issued only under exceptional circumstances, mainly due to elevated risks associated with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT).
“The MAS will grant licences under the new framework only in extremely limited circumstances (as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related),” Rooke commented. He advised affected firms to consider immediate operational restructuring to eliminate their Singapore connections and reduce regulatory risk.
Strengthening Oversight of Cross-Border Crypto Activity
Singapore’s decision reflects a significant tightening of its stance on crypto operations, especially those with cross-border exposure. The MAS has expressed concerns that crypto firms registered in Singapore could exploit regulatory loopholes by operating unregulated services in other countries.
The legislative shift began with the passing of the FSM Act in April 2022, which extended MAS’s authority to oversee Singapore-based crypto businesses operating abroad. The law mandates such firms to comply with the country’s AML and CFT obligations, regardless of whether they serve local customers.
This move is part of Singapore’s broader strategy to mitigate financial crime risks in the evolving digital asset space and ensure that firms based in the city-state uphold international regulatory standards.
