Singapore Directs Crypto Firms to Halt Overseas Operations in Crackdown on Unlicensed Providers

Singapore's financial authority has responded to feedback received from the crypto industry on its proposed crypto regulations. On May 30, the Monetary Authority of Singapore (MAS) outlined certain requirements to be fulfilled by Digital Token Service Providers (DTSPs) in Singapore. Crypto firms have been directed to halt overseas operations by the end of the month, as part of efforts to establish more control over crypto-related services. The regulator has also decided to limit the licenses issued to DTSPs.

Singapore's Crackdown on Unlicensed DTSPs

In its statement, the MAS reiterated its concerns around the possible exploitation of DTSPs by malicious actors for illegal money laundering. Local crypto firms have been directed to pause overseas operations by June 30. The MAS has refused to provide transitional arrangements for local DTSPs offering services abroad.

Local firms will need to to secure necessary licences in Singapore, before considering international expansion.

The first and second schedules to the Singapore Financial Services and Markets Act 2022 (FSM Act) are slated to come into force on June 30. DTSPs that violate the rules will be liable to pay severe penalties.

All the licensed crypto firms in Singapore will have to pay an annual fee of $10,000 (roughly Rs. 8.56 lakh) to retain their licences. Each of the registered firm must agree to regular audits of their operations, the fresh statement from the MAS noted.

Licensed crypto entities in Singapore must now deploy tech management solutions to combat the risks of breaches and hacking.

Several proposed laws from the regulator have garnered general support from the public, the statement by the MAS indicated.

While crypto holding and trading is legal in Singapore, no cryptocurrency is recognised as legal tender.

Earlier this year, Sony Electronics said that its Singapore-based customers can now pay for products using the USDC stablecoin.

Indian crypto advocacy group Bharat Web3 Association (BWA) and the Blockchain Association Singapore (BAS) signed an MoU in 2023 to collaborate on Web3 related developments.