Strict Deadline for Overseas Crypto Operations

Singapore’s Monetary Authority (MAS) has issued a firm June 30 deadline for domestic cryptocurrency providers to terminate digital token services offered abroad. This directive forms part of the enhanced Financial Services and Markets Act (FSM Act) 2022 regulations, with no transitional provisions for affected businesses. Companies must either secure licensing approval or completely wind down cross-border operations by the cutoff date.

Hefty Penalties for Non-Compliance

【S$250,000】 fines and 【3-year】 prison terms await violators under Section 137 of the FSM Act. The law presumes Singapore-registered entities operate domestically regardless of their primary business focus. ——This creates significant compliance challenges for firms with incidental crypto operations abroad—— notes legal experts. Only institutions licensed under existing financial laws (Payment Services Act, Securities and Futures Act) gain automatic exemption.

Licensing Hurdles and Operational Restructuring

Gibson Dunn partner Hagen Rooke reveals MAS will approve licenses in 【<1%】 of cases due to stringent anti-money laundering (AML) and counter-terrorism financing (CFT) concerns. The regulator specifically targets firms exploiting Singapore’s jurisdiction while conducting unregulated activities overseas. ——Companies should urgently evaluate operational footprints—— Rooke advises, suggesting removal of Singapore touchpoints through corporate restructuring.

Regulatory Expansion Since 2022

The April 2022 FSM Act amendment empowered MAS to oversee crypto firms’ extraterritorial activities. This latest move addresses regulatory arbitrage risks where companies establish Singapore bases while serving foreign markets. Interestingly, the rules apply even when firms don’t operate locally—a first among major financial hubs. The policy aligns with Singapore’s risk-averse stance following several high-profile crypto collapses.

Industry Impact and Future Outlook

Market analysts predict 【20-30%】 of Singaporean crypto ventures may shutter or relocate rather than attempt licensing. The restrictions notably affect: • Cross-border payment processors • Overseas NFT marketplaces • International token issuance platforms MAS maintains the measures protect Singapore’s financial reputation while allowing controlled innovation. However, some industry voices argue the rules could inadvertently push legitimate businesses to less regulated jurisdictions.

——As of press time—— at least three mid-sized crypto firms have begun relocating regional headquarters to Dubai and Hong Kong. The development marks Singapore’s sharpest regulatory intervention since banning retail crypto trading promotions in 2023.