Singapore’s Crypto Crackdown: Leading a Global Push to Close Regulatory Gaps

Singapore, June 7, 2025 - Singapore’s Monetary Authority of Singapore (MAS) issued a directive on May 30, 2025, ordering unlicensed cryptocurrency firms to cease serving overseas customers by June 30 or obtain a Digital Token Service Provider (DTSP) license under the Financial Services and Markets Act (FSMA). This move, far from a sudden shift, aligns with a global trend to tighten crypto regulations in accordance with Financial Action Task Force (FATF) standards, emphasizing anti-money laundering (AML) and counter-terrorism financing (CTF) measures.

With Singapore having issued 33 DTSP licenses compared to Hong Kong’s 10, the city-state is reinforcing its reputation as a financial hub, not just a crypto haven. The directive, following FATF’s February 2025 plenary session on payment transparency, signals the end of regulatory loopholes, with jurisdictions like Dubai, Thailand, and the Philippines also cracking down, leaving crypto firms with nowhere to hide.

Global Regulatory Alignment Gains Momentum

Singapore’s enforcement of the FSMA, which mandates licensing for digital token services to overseas clients, reflects a broader global push for compliance. The FATF, with 40 member countries including Singapore, has intensified scrutiny on crypto transactions, requiring Travel Rule compliance for transfers over SGD 1,500 ($1,100). Dubai’s Virtual Assets Regulatory Authority updated its Rulebook 2.0 in April 2025, imposing stricter AML protocols, while Thailand expelled five exchanges, including Bybit, for non-compliance, giving investors until June 28 to withdraw assets.

Hong Kong, a rival crypto hub, ordered unlicensed exchanges out by mid-2024, issuing only 10 licenses to firms like HashKey. These moves, driven by FATF’s push to combat $1.6 trillion in annual illicit crypto flows, underscore a shrinking landscape for regulatory arbitrage.

ALSO READ | Musk’s Trump Feud Sparks Dogecoin Plummet: Is His Meme Coin Magic Fading?

Singapore’s Consistent Stance on Compliance

Contrary to perceptions of a policy reversal, Singapore has maintained a steady regulatory approach since the Payment Services Act (PSA) of 2019, with the FSMA expanding oversight in 2022. The MAS has issued warnings since February 2022, clarifying that unlicensed firms serving overseas clients must comply or face penalties of up to $250,000 or three years’ imprisonment. Of 200 license applications since 2022, 147 have been withdrawn due to stringent requirements, including $250,000 in base capital and annual audits.

Licensed firms like Coinbase and Crypto.com thrive, contributing to Singapore’s $627 million in crypto funding across 88 deals in 2023. However, smaller startups struggle with compliance costs, prompting relocations to jurisdictions like Panama, where WazirX recently moved.

Did You Know?
Singapore’s crypto sector facilitated $1.2 trillion in digital asset transactions in 2024, making it the third-largest crypto hub after the U.S. and Hong Kong.

Challenges for Crypto Firms and Future Outlook

As the June 30 deadline looms, crypto firms face tough choices. The Blockchain Association of Singapore and firms like Circle have requested a three-month grace period, citing the $10,000 annual license fee and local staffing requirements. Hong Kong offers no easy refuge, with only 10 licenses issued and applications from firms like OKX under review. The Philippines now mandates physical offices, while Dubai, fresh off the FATF gray list, enforces $12,000 fines for AML violations.

The global regulatory wave suggests that compliance is non-negotiable, with the EU’s MiCA framework set for December 2025 and Japan revising its crypto laws. While Singapore’s actions may drive some firms out, they strengthen its financial ecosystem, potentially attracting $800 million in compliant crypto investments by 2026.