Singapore has issued strict deadlines to crypto companies operating from its jurisdiction to halt services to clients overseas, unless they secure their licenses under the new rules that came into effect at the end of June.
The Singapore Monetary Authority (MAS) has made it clear that no bounty period, transition plans or expansion will be offered.
MAS is implementing a new licensing system that is instantly effective
Starting June 30, any company, partnership or sole owner established in Singapore will need to provide digital token services to clients abroad. This requires you to maintain a Digital Token Service Provider (DTSP) license under the Financial Services and Markets Act 2022.
MAS said the restrictions apply regardless of the size of the business or the extent of exposure to abroad. The same rules apply even if a foreign business constitutes a small share of the company’s activities. Agents have previously closed it as a key loophole that allowed businesses to target international markets, whilst avoiding local surveillance.
“Entities must either obtain a DTSP license or cease activities abroad,” MAS said. “There is no transition arrangement.”
This rule applies based on where the company was established, not where the client or infrastructure is located. MAS also made clear that business model, scale, or revenue scale does not affect compliance requirements.
Unlicensed companies that will continue their digital token business overseas after June 30th will face criminal charges. Violation of Section 137 will result in a prison fine of up to SGD 250,000 (approximately 200,000 USD) and/or up to three years.
MAS has shown that it will not hesitate to take enforcement action and rejects industry demands for more flexible implementation.
License approval to remain rare amid AML concerns
MAS has not officially stopped the DTSP licensed application, but it has been confirmed that approvals are issued only in “very limited circumstances.” The move effectively constitutes a de facto moratorium on new licenses for global crypto companies.
Until the deadline, some crypto companies began operating and transferring staff to jurisdictions with a loosely regulated framework. However, MAS says providers should have anticipated changes and prepared them in advance.
The agency has revealed that companies currently authorized to serve Singapore-based clients may not be affected by the new measures and continue to serve both domestic and international clients. Token services associated with utility or governance tokens will also remain outside the scope of the new licensing scheme.
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