It’s getting tough out there! Singapore just sent a clear message to crypto firms: if you’re serving overseas clients from here without a licence, your time’s up.
As of June 30, the Monetary Authority of Singapore (MAS) has enforced new rules that require all digital token service providers (DTSPs) – even those working only with foreign clients – to hold a licence or shut down. And there isn’t much room for negotiation.
The central bank said it has “set the bar high for licensing and will generally not issue a licence” for firms serving only non-Singapore clients.
That’s because, according to MAS, these types of businesses come with higher money laundering risks, and the regulator can’t properly supervise them if their main activities happen outside the country.
This clampdown follows a rough stretch for Singapore’s crypto scene. The country’s once-solid reputation took a hit after the collapse of Three Arrows Capital and Terraform Labs, both based in Singapore.
3AC went under in 2022 after the market crash, with its co-founder Su Zhu later arrested at Changi Airport and handed a four-month jail sentence. Terraform’s Do Kwon fled the country, only to be caught in Montenegro and extradited to the U.S. on fraud charges. The firm’s downfall wiped out about $40 billion in investor funds and triggered wider losses across the crypto market.
With those disasters still fresh, MAS is clearly drawing a hard line to prevent history from repeating.
The move has been welcomed by analysts who see it as a long-overdue fix.
“With the new DTSP regime, MAS is reinforcing that financial integrity is a red line,” said Chengyi Ong, head of Asia Pacific policy at Chainalysis.
Law firm Gibson, Dunn & Crutcher also pointed out the shift brings Singapore in line with Financial Action Task Force (FATF) standards, the global benchmark for anti-money laundering and terrorism financing rules.
For crypto companies using Singapore as a base to serve clients abroad, this rule change is interesting but tough. They either need to get licensed or leave.
More than a crackdown, this is Singapore trying to protect its position as a serious player in global finance. After two high-profile collapses, MAS is trying to rebuild trust. Let’s see how it plays out.
Singapore is tightening regulations due to higher money laundering risks associated with businesses serving foreign clients, as MAS cannot effectively supervise activities primarily happening outside the country. This follows high-profile crypto collapses like Three Arrows Capital and Terraform Labs.
Crypto firms based in Singapore that serve clients abroad must now either obtain a license from MAS, which is very difficult to get for foreign-only services, or immediately cease their operations for overseas clients. There are no grace periods or transitional arrangements.
Singapore’s tightened regulations were prompted by the collapses of Three Arrows Capital (3AC) in 2022 and Terraform Labs. Both firms were based in Singapore, and their downfalls, which involved co-founder arrests and billions in investor losses, damaged Singapore’s reputation.
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