Singapore’s central bank has issued a directive to all domestic cryptocurrency service providers operating without a license, instructing them to cease their cross-border operations by June 30 or face severe penalties.
The Monetary Authority of Singapore (MAS) announced the move on May 30 as part of its effort to tighten regulatory oversight and protect retail investors in the digital asset sector.
Only licensed exchanges may serve foreign clients
Under the new rules, only exchanges that have obtained a Digital Token Service Provider (DTSP) license under the Payment Services Act are permitted to serve clients outside the country. Unlicensed entities must suspend or shut down their foreign services entirely.
The financial authority emphasised that there will be no transitional period, as companies have been aware of these requirements since the regulatory consultation process began.
The MAS further warned that any attempts to bypass the rules, whether by operating through intermediaries or relocating parts of a business abroad while maintaining management in Singapore, will be considered non-compliant.
“Cross-border services offered without regulatory clearance could expose users to unfair practices and raise the risk of financial misconduct,” the regulator stated in its official response to industry feedback.
The crackdown comes as digital currency adoption in Singapore continues to rise, with about 26 percent of Singaporeans owning digital assets in 2024.
They also made it clear that violations will not be tolerated. Companies found operating without a license after the deadline could face fines of up to 250,000 Singaporean dollars ($200,000) and imprisonment for up to three years. The regulator also warned that it will monitor and investigate suspicious setups designed to bypass licensing requirements.
Only companies licensed or exempted under existing financial laws, such as the Securities and Futures Act, Financial Advisers Act, or Payment Services Act, may continue operations without conflict.
Singapore aligns with global crypto clampdown trend
The nation’s move aligns with a global push to regulate cross-border crypto activities. Last month, Australia’s financial watchdog (AUSTRAC) fined crypto exchange Cointree $75,120 for delayed reporting of suspicious transactions linked to potential money laundering.
The MAS has similarly stressed the need to close regulatory gaps that could allow firms to exploit lax oversight in overseas markets.
As of today, the MAS has issued 33 digital payment token licenses, with major players like Coinbase and Anchorage among the approved entities. Cumberland SG, the Asia subsidiary of U.S.-based Cumberland, received in-principle approval in March but has yet to secure a full license.
While the new rules may force some exchanges to restructure or exit the market, the regulator maintains that its approach strikes a balance between fostering innovation and ensuring a safe digital asset environment.
“Our aim is to protect consumers while supporting the development of a secure and sustainable crypto ecosystem,” the regulator stated.