Singapore has long welcomed crypto startups with open arms.
But as of June 30, any exchange, trading platform or digital-asset service incorporated or operating in Singapore must hold a Monetary Authority of Singapore (MAS) licence as a Digital Token Service Provider (DTSP) – or cease operations, even if all their users are overseas.
Initially, the Payment Services Act – a law that took effect in 2020 to regulate digital payments and money-transfer companies – required a permit only for firms serving local customers. Many exchanges registered in Singapore but inserted “no-Singapore-persons” clauses, blocked domestic IP addresses, and targeted marketing offshore to claim they lay outside MAS’s reach. The new DTSP regime explicitly closes that loophole: any entity incorporated in, or maintaining a business presence in, Singapore must hold a license, regardless of where its users are located.
The push for tougher rules wasn’t just bureaucracy. In May 2022, Terraform Labs’ UST stablecoin lost its $1 peg and the Terra ecosystem imploded, vaporizing up to $40 billion in days. Not long after, Three Arrows Capital burned through over $3 billion in borrowed funds and collapsed under crippling debt. Those scandals exposed how some Singapore-based firms were operating with virtually no risk controls – making massive, uninsured bets and putting MAS on the hook for unmanageable exposures.
MAS opened the DTSP application window to hundreds of firms but has so far granted licenses to only 33 players, including exchanges and coin issuers such as Crypto.com, Coinbase, Circle, Ripple and OKX. Major exchanges like Bitget and Bybit still remain unlicensed and are planning moves to friendlier jurisdictions like Hong Kong and Dubai. Smaller firms which lack in-house legal and compliance teams face a tough choice: meet MAS’s strict requirements or exit the market.
Licensed DTSPs will now have to:
Firms caught operating without a license will risk fines of up to S$250,000 and up to three years’ imprisonment for their personnel.
Singapore’s tougher approach is intended to close a big oversight gap and present the city-state as a leader in regulated digital finance. It may also lead to an exodus of unlicensed firms to more relaxed jurisdictions, for example, Dubai or Hong Kong.
Those that stay in Singapore will face one of the strictest licensing regimes in the world.
