On June 30, Singapore Wants Cryptocurrency Companies to Stop Doing Business Overseas
Singapore is clamping down on the crypto market. It has issued a directive to digital token service providers in Singapore. They need to cease offering services to overseas clients by 30 June 2025. Otherwise, any firm that continues to serve foreign clients will face serious consequences.
This directive has come directly from the Monetary Authority of Singapore (MAS), which has rolled out its updated licensing framework under the Financial Services and Markets (FSM) Act of 2022. According to the MAS, there will be no grace period. All unauthorized firms must stop cross-border operations or get a proper license before the deadline.
Penalties for Non-Compliance Are Severe
According to Section 137 of the FSM Act, any company, individual, or partnership based in Singapore that is found to provide digital token services to a client based outside Singapore without a license will be considered to be operating from Singapore—even if the provision of such digital token services is not their core activity. Violations could result in:
- Fines can reach as high as SGD 250,000.
- Prison sentences of up to three years.
The MAS also noted that only those currently licensed or exempted from existing laws such as the Payment Services Act or Securities and Futures Act will be allowed to continue without breaching the new rules.
Licensing Will Be Rare
Despite licensing being allowed under the MAS framework, experts warn that approvals will be minimal. Hagen Rooke, partner at Gibson Dunn & Crutcher, noted that licenses will only be issued under very strict compliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) rules.
“This operating model normally carries high regulatory risk,” Rooke stated in a LinkedIn post, suggesting firms rethink their operations in a bid to cut ties to Singapore.
Industry Pushback and Compliance Concerns
Crypto bigwigs worry about the deadline set for the bill. Numerous companies contend that four weeks are not enough time to reshape operations or file for licenses. Proposals from the industry have included:
- Temporary exemptions for firms under review.
- Fast-track licensing for simpler business models.
- A short grace period to ease the transition.
But MAS continues to stand by its position—no exceptions were made or allowed.
A Broader Move to Tackle Regulatory Arbitrage
Singapore’s effort to plug regulatory loopholes is reflected in this move. Officials fear that firms could use their base in Singapore to offer unregulated crypto services abroad. The FSM Act, which was introduced in April 2022, was specifically designed to achieve this objective, giving the MAS greater powers to monitor Singapore-based cross-border activities.
Recently, MAS also blocked Polymarket for allegedly offering unlicensed betting. This shows Singapore’s determination to crack down on crypto activities.
Conclusion
Crypto firms incorporated in Singapore need to act with June 30 deadline approaching fast. Companies may face huge legal and financial repercussions if they do not comply with the laws—be it getting a license or exiting overseas markets.
