Singapore set a June 30 deadline for crypto firms to stop overseas operations or face fines of up to $200,000 per the central bank’s new directive.
The Central Bank of Singapore has given local crypto service companies until June 30 to stop providing digital token (DT) services to markets outside of Singapore.
The Monetary Authority of Singapore (MAS) issued the order after hearing from the business world about its plans to regulate Digital Token Service Providers (DSTPs) under the Financial Services and Markets Act of 2022 (FSM Act).
MAS said there would be no transitioning plans for local DTSPs offering services abroad.
It noted that any Singapore-based business, person, or group offering DT services outside the country would have to shut down or get a license by the end of June when the DTSP rules go into effect.
MAS wrote, “DTSPs that need a license under section 137 of the FSM Act must suspend or cease doing business as a provider of DT services outside of Singapore by June 30, 2025.”
People Who Break Rules Could Be Fined Almost $200,000
Section 137 of the FSM Act says businesses with the country’s address are thought to be working from the country and must get a license.
This includes businesses that don’t do token-related business abroad as their primary business.
Firms caught breaking the rules could face hefty fines of up to 250,000 Singaporean dollars ($200,000) or jail time of up to three years.
MAS said that companies registered or exempt under the Securities and Futures Act, the Financial Advisers Act, or the Payment Services Act can keep running without breaking the new rules.
DTSPs might be able to get licenses, but a judge said it would only happen very rarely.
Hagen Rooke, a Partner at Gibson, Dunn & Crutcher, wrote on LinkedIn that permits will only be given in rare cases because of increased regulatory worries about stopping terrorist financing (CFT) and money laundering (AML).
According to Rooke, the MAS will only give licenses under the new system in specific situations.
This is because this way of doing business usually causes regulatory concerns, such as those related to AML/CFT.
The lawyer told the companies to act quickly to lower their risk by reorganizing their operations to eliminate their Singapore contacts.
Singapore Deals With Risks That Span Borders
The move means that the country’s government will closely monitor crypto activities.
Because of changes in regulations intended to lower risks in the digital asset sector, DTSPs are now required to stop doing business abroad.
the country passed the FSM bill in April 2022. This gave MAS more power to control crypto companies that do business outside of Singapore but are based there.
AML and CFT rules must be followed by DTSPs with businesses outside of Singapore, even if they don’t provide services in Singapore.
MAS was worried that crypto companies could take advantage of holes in the rules by registering in the country but doing illegal business in other countries.