Singapore’s Monetary Authority (MAS) has unveiled updated regulations under the Financial Services and Markets Act 2022 (FSM Act), mandating that all digital token service providers (DTSPs) operating in or linked to Singapore must obtain a license by June 30. This move aims to strengthen oversight of the digital asset sector and mitigate risks such as money laundering and regulatory arbitrage.
Key Regulatory Updates
1. Licensing Requirements for DTSPs
Under the new framework, DTSPs—including those offering services to overseas clients—must secure a license from MAS. The definition of “digital token services” encompasses:
- Brokerage or trading platforms (e.g., crypto exchanges)
- Digital payment token exchange services
- Custodial wallet services
- Investment advisory services for digital assets
👉 Learn more about compliance guidelines
2. Scope and Applicability
- Singapore-registered entities and individuals with a local business presence fall under these rules, regardless of client location.
- Exemptions apply to firms already licensed under existing laws (e.g., Payment Services Act or Securities and Futures Act).
3. Transition Period and Enforcement
- No grace period: Unlicensed DTSPs must cease operations by June 30.
- Penalties for non-compliance include fines up to S$250,000 for corporations and three-year imprisonment for individuals.
Implications for Stakeholders
Affected Parties
- Offshore-focused DTSPs with Singapore offices
- Partnerships or sole proprietors offering digital token services
Exemptions
- Firms already licensed under PSA/SFA
- Entities with no Singapore-based operations or clients
FAQs
Q: Does this apply to decentralized platforms?
A: Yes, if they meet the DTSP criteria and have a Singapore nexus.
Q: Are foreign employees of DTSPs subject to licensing?
A: Only if they independently offer regulated services locally.
Q: How can firms assess their compliance status?
A: Conduct a self-assessment using MAS-aligned screening tools or consult legal experts.
👉 Explore compliance resources
Strategic Recommendations
- Evaluate Licensing Needs: Assess whether your operations qualify as regulated activities.
- Avoid Local Advertising: Refrain from Singapore-targeted promotions if unlicensed.
- Review Business Structures: Ensure clear separation between local and overseas roles.
Singapore’s updated FSM Act closes prior regulatory gaps, aligning with global standards for digital asset oversight. Firms must act promptly to adhere to the June 30 deadline.
For further details, refer to MAS’s official guidelines.