Singapore’s MAS confirms crypto firms serving only overseas clients need a license it “generally won’t issue,” effectively enforcing a near-ban.
After industry panic over a possible ban on cryptocurrency companies that serve clients abroad, the Monetary Authority of Singapore (MAS) has clarified its regulations for Digital Token Service Providers (DTSPs).
Crypto companies “providing services solely to customers outside of Singapore relating to digital payment tokens and tokens of capital market products will need to be licensed” as of June 30, according to a June 6 notification from MAS.
However, the agency cautioned that only “minimal circumstances” would result in granting such permits.
The agency stated, “MAS has set the bar high for licensing and will generally not issue a license,” pointing to the challenges of overseeing offshore companies and the potential for money laundering as significant issues.
MAS cannot adequately supervise such individuals,” the agency continued. Businesses unable to secure permits will, therefore, “have to cease their regulated activities.”
Is Crypto Exodus Beginning?
The MAS’s June 30 deadline for local crypto service providers to cease providing digital token services to foreign markets earlier this month caught the attention of the cryptocurrency market.
The new regulations have already brought about a change.
Shortly after the MAS set the deadline, Singapore-based cryptocurrency exchange WazirX, which serves India, announced that it would relocate its operations to Panama.
Hagen Rooke, a partner at Gibson, Dunn & Crutcher, stated that licenses would only be granted in exceptional circumstances at the time of the deadline notification. He wrote in a LinkedIn post:
“The MAS will grant licences under the new framework only in extremely limited circumstances (as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related).”
Singapore Strengthens Its Crypto Regulations
According to recent actions by Singaporean regulators, local authorities plan to continue enforcing more stringent regulations on the local cryptocurrency market.
According to today’s news, crypto firms serving clients in Singapore “are already subject to regulation,” and those serving customers overseas are now subject to the guidelines.
However, according to MAS, not all services related to cryptocurrency are impacted:
“Providers of services in relation to other tokens, such as those only used as utility and governance tokens, are not subject to licensing or regulation under the new regime, and hence are not impacted.“
Following May reports that digital assets are popular nationwide, Singapore changed its regulations.
According to a recent study, 94% of respondents said they were familiar with at least one digital asset, showing that cryptocurrency awareness in Singapore has hit an all-time high.
