Singapore introduces tougher crypto regulations, requiring overseas-serving digital token firms to secure licences or shut down, as the city-state moves to combat money laundering and safeguard its financial reputation.
Singapore has ushered in a new era of strict cryptocurrency regulations aimed at clamping down on money laundering and restoring market confidence following a series of damaging scandals that have shaken the sector.
As of Monday, the city-state’s central bank, the Monetary Authority of Singapore (MAS), has mandated that all digital token service providers (DTSPs) catering solely to overseas clients must obtain a licence to continue operations beyond June 30 — or face closure.
The MAS clarified that these requirements form part of broader efforts to tighten oversight of the rapidly growing crypto industry, which has in recent years posed significant regulatory challenges worldwide.
In a statement, the central bank explained that licensing standards would be deliberately rigorous, adding that it would “set the bar high for licensing and will generally not issue a licence” for businesses that fall short of expectations.
The regulatory crackdown comes as Singapore battles to repair its reputation after a string of high-profile scandals eroded public trust in its once-promising crypto sector.
“The money laundering risks are higher in such business models. If their substantive regulated activity is outside of Singapore, the MAS is unable to effectively supervise such persons,” the central bank stated, referring to firms that primarily serve foreign clients while maintaining a base in Singapore.
Industry experts and analysts have broadly welcomed the move, describing it as a necessary step to safeguard Singapore’s standing as a trusted global financial hub.
“With the new DTSP regime, MAS is reinforcing that financial integrity is a red line,” said Chengyi Ong, head of Asia Pacific policy at crypto data firm Chainalysis.
“The goal is to insulate Singapore from the reputational risk that a crypto business based in Singapore, operating without sufficient oversight, is knowingly or unknowingly involved in illicit activity,” Ong added.
Singapore has long positioned itself as a leading global centre for financial innovation, but authorities have increasingly voiced concerns about the potential misuse of digital assets for illegal purposes, including money laundering and fraud.
The latest regulatory measures reflect Singapore’s cautious yet determined approach to striking a balance between fostering innovation and ensuring the stability and integrity of its financial system.
With the new rules in force, market participants will be watching closely to see how the tougher stance reshapes the future of crypto operations in the city-state and beyond.
