On June 30, 2025, the Monetary Authority of Singapore (MAS) will officially implement new regulations for Digital Token Service Providers (DTSP). The bill clearly stipulates that institutions and individuals providing digital token services as defined by the FSM in Singapore must be licensed to operate; otherwise, they will be in violation of the law.
In the early years, the Singapore government actively embraced Web3, and with the FTX crash and the Luna crash, it began to emphasize finding a balance between innovation and risk control, and classified and regulated the crypto industry by formulating regulations and issuing guidelines. And on June 30, the implementation of the new regulations, it seems that the era of stricter supervision has arrived.
And the sky did not change suddenly, just like the implementation of the licensing guide, it did not come out of nowhere. MAS has passed the Payment Services Act since 2020 to regulate digital payment tokens, requiring local businesses that provide services such as crypto exchanges to apply for a license. Since then, MAS has realized that there is still room for regulatory arbitrage: some crypto companies have set up a presence in Singapore but only serve overseas customers in order to evade local licensing requirements. To close this loophole and comply with the Financial Action Task Force (FATF) criteria, the Financial Services and Markets Act was passed in April 2022, Part 9 of which specifically introduces a licensing regime for digital token service providers. After the law was passed, MAS did not strictly enforce it immediately. However, the Act requires all Singapore-registered companies (regardless of whether they are in Singapore or not) to apply for a DTSP license, ending the exemption period of "no need to hold a license to serve overseas customers".
The formal implementation of the "Guidelines for Licensing Digital Token Service Providers" is merely the hammer of regulation finally striking down, while the large institutions remain.
Both individuals and institutions need to be licensed to operate
The Monetary Authority of Singapore (MAS) has clearly stated that the new DTSP regulations will officially take effect on June 30, 2025, with no grace period. All unlicensed digital token service providers must cease providing services to overseas clients before this date, or they will be considered illegal and may face fines, revocation of registration, and even criminal liability. This move demonstrates Singapore's determination in regulating the digital token service sector, leaving no room for non-compliance.
The new regulations stipulate that the licensed entity must be a Singapore-registered company or entity, and must have a clear overseas business structure and customer compliance process. In terms of capital requirements, the minimum paid-up capital is S$250,000, which will be increased to a higher tiered capital requirement for complex businesses such as custody, leverage, derivatives, etc. In addition, the licensed institution is required to pay an annual fee of S$10,000 per annum, and the controlling person (director, CEO) must have an appropriate financial background and a good reputation record, and the position must be a Singaporean. The MAS emphasised that DTSP licences will be approved in an "extremely cautious" manner and that applications will only be approved in "extremely limited circumstances", meaning that only a small number of companies that meet the high standards will be granted.
The DTSP license almost covers all services in the digital token industry chain, including issuance, trading, transfer, custody, and operation, all of which are under regulation. Specifically, it includes digital token exchange services, transfer services, underwriting or promotion services for issued tokens, custody or management of tokens, trading matching platforms, token derivatives and contract product design and trading services, etc. Moreover, independent developers, KOLs, and consultants who provide "token-related advice" must also apply for a license. The new regulations also stipulate that even if a company's users are all overseas, as long as the operating entity is registered in Singapore, it must apply for this license. Furthermore, without a license, neither individuals nor companies can conduct business targeting local or overseas clients in any business premises in Singapore.
The most noteworthy aspect of the new regulations is the comprehensive coverage of regulatory scope. Regardless of whether it is a company or an individual, as long as they provide digital token services, they need to be regulated. Only employees of overseas companies are allowed to work from home.
Regulatory Gradual Upgrade After FTX Crash
The recent significant enhancement of regulatory measures for digital token services in Singapore is not a sudden policy shift. Firstly, back in 2020, the MAS passed the Payment Services Act, which brought digital payment tokens under regulation, requiring local businesses providing cryptocurrency exchange services to apply for licenses.
However, the tightening of clear regulations indeed began at the end of 2022, when FTX collapsed and Luna crashed, plunging the crypto world into its darkest hour.
After the FTX collapse, a large number of investors, including Singapore's sovereign wealth fund Temasek, faced substantial losses. Starting in 2023, regulatory measures have been intensively introduced, involving licensing requirements for institutions and various aspects of retail investor protection.
In May 2023, the Financial Services and Markets (Amendment) Act was passed, with the amendment primarily focusing on the sharing of customer information between financial institutions to combat money laundering and terrorist financing.
In August 2023, the Monetary Authority of Singapore (MAS) announced the final regulatory framework for stablecoins. The framework regulates stablecoins from many aspects, clearly stipulating that only qualified institutions such as banks and subsidiaries of large financial groups can issue stablecoins; Issuers are required to be backed by Singapore dollars or other major currencies, with sufficient reserves and regular audits to ensure currency stability; In terms of operation, issuers should establish and improve risk management and conflict of interest management mechanisms to ensure compliant operations. This framework makes Singapore one of the first jurisdictions in the world to incorporate stablecoins into its local regulatory system, laying the foundation for the regulated development of the stablecoin market.
In October 2023, MAS also proposed to prohibit retail investors from using credit cards and leverage to purchase cryptocurrencies.
The core of these policies lies in strict risk segregation and strengthening protections for retail investors. These intensive policies indicate that Singapore is transitioning from a "crypto-friendly safe haven" to a "high-compliance threshold innovation center." It is also during this year, as the transition period ends at the end of 2023, that several unlicensed exchanges have either actively or passively exited Singapore. Exchanges such as Binance, Bybit, and Huobi have all suspended local services for Singapore users this year.
The new DTSP regulations, which will officially come into effect on June 30, are more stringent than the amendments to the Financial Services and Markets Act passed by MAS in April 2023. The 2023 FSMA amendment mainly addresses the issue of regulatory jurisdiction, forcing all Singapore-affiliated enterprises (including serving overseas customers) to be included in the scope of the license and plugging offshore loopholes; The new DTSP rules in 2025 set high barriers to entry and stringent ongoing compliance requirements, such as the implementation of a tiered capital regime (minimum S$500,000 and maximum S$2 million), which is 5-20 times higher than the previous non-rigid standard; Mandatory cold storage of 90% of customer assets, real-time monitoring of on-chain transactions, and reporting of major events within 1 hour; Operating without a license is punishable by up to 7 years in prison + a fine of 1 million, and the mixing of customer assets is a criminal offense.
The new regulations clarify "how to manage and how strict to be," and the very purpose of these regulations is to push Singapore's Web3 into an era of "only giants can play" with high compliance costs by filtering out 99% of small and medium-sized institutions.
Indeed, at present, the known licensed (including digital currency payment license) companies include Anchorage Digital Singapore, BitGo Singapore, Blockchain.com (Singapore), Bsquared Technology, Circle Internet Singapore, Coinbase Singapore, DBS Vickers Securities (Singapore), OKX, Paxos, Ripple, HashKey and GSR, a total of 33 well-known institutions. All of these institutions are giants in the crypto industry, or they have a deep background in traditional finance.
Real losses, damage to national reputation, pressure from international regulation
Behind such strictness is actually the consistent style of Singapore, a country that values a rigorous legal system. Initially, Singapore actively embraced Web3, attracting a large number of industry institutions and the immigration of industry leaders. However, the subsequent tightening of regulations is actually a process of recognizing the issues that have emerged during the acceptance of Web3, leading to the gradual establishment of laws and regulations for oversight. In the process of experimentation and innovation, Singapore has discovered that "the problems with cryptocurrencies seem to be quite significant."
The Director of MAS, Men Wenning, emphasized at the 2023 February release of the "Financial Stability Assessment" that "Singapore's approach to the cryptocurrency industry is that quality is more important than quantity. We do not intend to become a 'loose' hub for cryptocurrency activities, but are committed to developing an ecosystem composed of trustworthy and responsible participants, focusing on risk management and compliance."
In the consultation paper on the new DTSP regulations in 2025, MAS clearly stated: "Due to the internet-based and cross-border nature of digital token services, digital token service providers are (DTSPs) more vulnerable to money laundering/terrorist financing (ML/TF) risks...... The main risk posed by DTSPs to Singapore will be reputational risk, i.e. the potential to damage Singapore's reputation if they are involved in or misused for illegal purposes"
It can be said that the collapse of FTX is the biggest driving factor that makes Singapore have to clarify strict regulations. At that time, Singapore's sovereign wealth fund Temasek lost US$275 million on its investment in FTX, and then-Deputy Prime Minister Lawrence Wong (now Prime Minister) publicly admitted that the incident had caused "national reputational damage", and Temasek held investment team executives accountable for salary cuts.
In August 2023, Singapore uncovered the largest money laundering case in history, involving an amount of 3 billion Singapore dollars. The case utilized cryptocurrencies and shell companies for money laundering, with assets spread across 7 countries globally, including 15 luxury residences in Singapore and deposits of over 100 million Singapore dollars.
At the same time, Singapore is also facing international regulatory pressure, and the international anti-money laundering organization FATF released the "Singapore Anti-Money Laundering/Counter-Terrorism Financing Measures Mutual Evaluation Report" in October 2023, which clearly pointed out: "There is a gap in the supervision of cross-border activities of virtual asset service providers (VASPs) in Singapore, especially offshore entities serving overseas customers are not fully included in the jurisdiction. The report warns that if Singapore fails to close the loopholes, it could trigger the FATF's "enhanced follow-up process" (i.e., pre-greylisting early warning mechanism).
Faced with real losses, damage to national reputation, and pressure from international regulation and public opinion, Singapore has no choice but to implement strict regulations on Web3. The changes in Singapore are merely a reflection of the gradually clarifying global cryptocurrency regulations. In fact, international cryptocurrency regulation is moving towards a situation of comprehensive tightening, strengthening compliance, and enhancing international cooperation. Countries are actively adjusting their regulatory strategies based on their own circumstances to address the risks and challenges posed by the cryptocurrency market.
Compliance is the main theme of future crypto development, and only powerful institutions will be the main players at the crypto table. The opportunities for small investors and grassroots entrepreneurs are becoming limited.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Singapore "abandoned" Web3 encryption, ultimately becoming the table for large institutions.
Jessy, Golden Finance
Has Singapore changed?
On June 30, 2025, the Monetary Authority of Singapore (MAS) will officially implement new regulations for Digital Token Service Providers (DTSP). The bill clearly stipulates that institutions and individuals providing digital token services as defined by the FSM in Singapore must be licensed to operate; otherwise, they will be in violation of the law.
In the early years, the Singapore government actively embraced Web3, and with the FTX crash and the Luna crash, it began to emphasize finding a balance between innovation and risk control, and classified and regulated the crypto industry by formulating regulations and issuing guidelines. And on June 30, the implementation of the new regulations, it seems that the era of stricter supervision has arrived.
And the sky did not change suddenly, just like the implementation of the licensing guide, it did not come out of nowhere. MAS has passed the Payment Services Act since 2020 to regulate digital payment tokens, requiring local businesses that provide services such as crypto exchanges to apply for a license. Since then, MAS has realized that there is still room for regulatory arbitrage: some crypto companies have set up a presence in Singapore but only serve overseas customers in order to evade local licensing requirements. To close this loophole and comply with the Financial Action Task Force (FATF) criteria, the Financial Services and Markets Act was passed in April 2022, Part 9 of which specifically introduces a licensing regime for digital token service providers. After the law was passed, MAS did not strictly enforce it immediately. However, the Act requires all Singapore-registered companies (regardless of whether they are in Singapore or not) to apply for a DTSP license, ending the exemption period of "no need to hold a license to serve overseas customers".
The formal implementation of the "Guidelines for Licensing Digital Token Service Providers" is merely the hammer of regulation finally striking down, while the large institutions remain.
Both individuals and institutions need to be licensed to operate
The Monetary Authority of Singapore (MAS) has clearly stated that the new DTSP regulations will officially take effect on June 30, 2025, with no grace period. All unlicensed digital token service providers must cease providing services to overseas clients before this date, or they will be considered illegal and may face fines, revocation of registration, and even criminal liability. This move demonstrates Singapore's determination in regulating the digital token service sector, leaving no room for non-compliance.
The new regulations stipulate that the licensed entity must be a Singapore-registered company or entity, and must have a clear overseas business structure and customer compliance process. In terms of capital requirements, the minimum paid-up capital is S$250,000, which will be increased to a higher tiered capital requirement for complex businesses such as custody, leverage, derivatives, etc. In addition, the licensed institution is required to pay an annual fee of S$10,000 per annum, and the controlling person (director, CEO) must have an appropriate financial background and a good reputation record, and the position must be a Singaporean. The MAS emphasised that DTSP licences will be approved in an "extremely cautious" manner and that applications will only be approved in "extremely limited circumstances", meaning that only a small number of companies that meet the high standards will be granted.
The DTSP license almost covers all services in the digital token industry chain, including issuance, trading, transfer, custody, and operation, all of which are under regulation. Specifically, it includes digital token exchange services, transfer services, underwriting or promotion services for issued tokens, custody or management of tokens, trading matching platforms, token derivatives and contract product design and trading services, etc. Moreover, independent developers, KOLs, and consultants who provide "token-related advice" must also apply for a license. The new regulations also stipulate that even if a company's users are all overseas, as long as the operating entity is registered in Singapore, it must apply for this license. Furthermore, without a license, neither individuals nor companies can conduct business targeting local or overseas clients in any business premises in Singapore.
The most noteworthy aspect of the new regulations is the comprehensive coverage of regulatory scope. Regardless of whether it is a company or an individual, as long as they provide digital token services, they need to be regulated. Only employees of overseas companies are allowed to work from home.
Regulatory Gradual Upgrade After FTX Crash
The recent significant enhancement of regulatory measures for digital token services in Singapore is not a sudden policy shift. Firstly, back in 2020, the MAS passed the Payment Services Act, which brought digital payment tokens under regulation, requiring local businesses providing cryptocurrency exchange services to apply for licenses.
However, the tightening of clear regulations indeed began at the end of 2022, when FTX collapsed and Luna crashed, plunging the crypto world into its darkest hour.
After the FTX collapse, a large number of investors, including Singapore's sovereign wealth fund Temasek, faced substantial losses. Starting in 2023, regulatory measures have been intensively introduced, involving licensing requirements for institutions and various aspects of retail investor protection.
In May 2023, the Financial Services and Markets (Amendment) Act was passed, with the amendment primarily focusing on the sharing of customer information between financial institutions to combat money laundering and terrorist financing.
In August 2023, the Monetary Authority of Singapore (MAS) announced the final regulatory framework for stablecoins. The framework regulates stablecoins from many aspects, clearly stipulating that only qualified institutions such as banks and subsidiaries of large financial groups can issue stablecoins; Issuers are required to be backed by Singapore dollars or other major currencies, with sufficient reserves and regular audits to ensure currency stability; In terms of operation, issuers should establish and improve risk management and conflict of interest management mechanisms to ensure compliant operations. This framework makes Singapore one of the first jurisdictions in the world to incorporate stablecoins into its local regulatory system, laying the foundation for the regulated development of the stablecoin market.
In October 2023, MAS also proposed to prohibit retail investors from using credit cards and leverage to purchase cryptocurrencies.
The core of these policies lies in strict risk segregation and strengthening protections for retail investors. These intensive policies indicate that Singapore is transitioning from a "crypto-friendly safe haven" to a "high-compliance threshold innovation center." It is also during this year, as the transition period ends at the end of 2023, that several unlicensed exchanges have either actively or passively exited Singapore. Exchanges such as Binance, Bybit, and Huobi have all suspended local services for Singapore users this year.
The new DTSP regulations, which will officially come into effect on June 30, are more stringent than the amendments to the Financial Services and Markets Act passed by MAS in April 2023. The 2023 FSMA amendment mainly addresses the issue of regulatory jurisdiction, forcing all Singapore-affiliated enterprises (including serving overseas customers) to be included in the scope of the license and plugging offshore loopholes; The new DTSP rules in 2025 set high barriers to entry and stringent ongoing compliance requirements, such as the implementation of a tiered capital regime (minimum S$500,000 and maximum S$2 million), which is 5-20 times higher than the previous non-rigid standard; Mandatory cold storage of 90% of customer assets, real-time monitoring of on-chain transactions, and reporting of major events within 1 hour; Operating without a license is punishable by up to 7 years in prison + a fine of 1 million, and the mixing of customer assets is a criminal offense.
The new regulations clarify "how to manage and how strict to be," and the very purpose of these regulations is to push Singapore's Web3 into an era of "only giants can play" with high compliance costs by filtering out 99% of small and medium-sized institutions.
Indeed, at present, the known licensed (including digital currency payment license) companies include Anchorage Digital Singapore, BitGo Singapore, Blockchain.com (Singapore), Bsquared Technology, Circle Internet Singapore, Coinbase Singapore, DBS Vickers Securities (Singapore), OKX, Paxos, Ripple, HashKey and GSR, a total of 33 well-known institutions. All of these institutions are giants in the crypto industry, or they have a deep background in traditional finance.
Real losses, damage to national reputation, pressure from international regulation
Behind such strictness is actually the consistent style of Singapore, a country that values a rigorous legal system. Initially, Singapore actively embraced Web3, attracting a large number of industry institutions and the immigration of industry leaders. However, the subsequent tightening of regulations is actually a process of recognizing the issues that have emerged during the acceptance of Web3, leading to the gradual establishment of laws and regulations for oversight. In the process of experimentation and innovation, Singapore has discovered that "the problems with cryptocurrencies seem to be quite significant."
The Director of MAS, Men Wenning, emphasized at the 2023 February release of the "Financial Stability Assessment" that "Singapore's approach to the cryptocurrency industry is that quality is more important than quantity. We do not intend to become a 'loose' hub for cryptocurrency activities, but are committed to developing an ecosystem composed of trustworthy and responsible participants, focusing on risk management and compliance."
In the consultation paper on the new DTSP regulations in 2025, MAS clearly stated: "Due to the internet-based and cross-border nature of digital token services, digital token service providers are (DTSPs) more vulnerable to money laundering/terrorist financing (ML/TF) risks...... The main risk posed by DTSPs to Singapore will be reputational risk, i.e. the potential to damage Singapore's reputation if they are involved in or misused for illegal purposes"
It can be said that the collapse of FTX is the biggest driving factor that makes Singapore have to clarify strict regulations. At that time, Singapore's sovereign wealth fund Temasek lost US$275 million on its investment in FTX, and then-Deputy Prime Minister Lawrence Wong (now Prime Minister) publicly admitted that the incident had caused "national reputational damage", and Temasek held investment team executives accountable for salary cuts.
In August 2023, Singapore uncovered the largest money laundering case in history, involving an amount of 3 billion Singapore dollars. The case utilized cryptocurrencies and shell companies for money laundering, with assets spread across 7 countries globally, including 15 luxury residences in Singapore and deposits of over 100 million Singapore dollars.
At the same time, Singapore is also facing international regulatory pressure, and the international anti-money laundering organization FATF released the "Singapore Anti-Money Laundering/Counter-Terrorism Financing Measures Mutual Evaluation Report" in October 2023, which clearly pointed out: "There is a gap in the supervision of cross-border activities of virtual asset service providers (VASPs) in Singapore, especially offshore entities serving overseas customers are not fully included in the jurisdiction. The report warns that if Singapore fails to close the loopholes, it could trigger the FATF's "enhanced follow-up process" (i.e., pre-greylisting early warning mechanism).
Faced with real losses, damage to national reputation, and pressure from international regulation and public opinion, Singapore has no choice but to implement strict regulations on Web3. The changes in Singapore are merely a reflection of the gradually clarifying global cryptocurrency regulations. In fact, international cryptocurrency regulation is moving towards a situation of comprehensive tightening, strengthening compliance, and enhancing international cooperation. Countries are actively adjusting their regulatory strategies based on their own circumstances to address the risks and challenges posed by the cryptocurrency market.
Compliance is the main theme of future crypto development, and only powerful institutions will be the main players at the crypto table. The opportunities for small investors and grassroots entrepreneurs are becoming limited.