Singapores Regulatory Crackdown on Overseas Crypto Firms: New Licensing Requirements Enforced

The Monetary Authority of Singapore (MAS) has required cryptocurrency firms to obtain a Digital Token Service Provider (DTSP) license. If they fail to do so, they must stop servicing foreign clients by June 30.

The regulator has adopted a stringent stance: there will be no grace period, and violators will face penalties.

These new regulations will affect companies that are either based in or registered in Singapore, which offer digital token services overseas without a DTSP license, as mandated by the Financial Services and Markets Act 2022 (FSM Act).

The authority has warned that licenses will be granted only under «extremely limited circumstances.» Firms must comply with international benchmarks set by organizations like the Financial Action Task Force (FATF).

Minimum capital requirements have been established: $250,000 for companies and individual operators. Additionally, company management must meet specific criteria regarding their experience and understanding of local laws. Licensed platforms are required to undergo annual independent audits of their transactions and submit reports to MAS.

The MAS explained its decision by citing heightened risks of money laundering and terrorist financing. The agency believes that the cross-border nature of crypto services makes them more susceptible to these risks.

As a reminder, in September 2024, Singapore initiated an investigation into seven individuals suspected of selling Worldcoin accounts and providing token trading services.