On June 30, 2025, key crypto licensing provisions in Singapore’s Financial Services and Markets Act (FSMA) finally take effect — three years after the legislation passed. In a long-awaited consultation response issued on May 30, 2025, the Monetary Authority of Singapore (MAS) clarified the new licensing requirements under the FSMA for digital token service providers (DTSPs). It also gave four weeks’ notice of the requirements’ commencement on June 30.
This regulatory update has prompted wide-ranging reactions across the crypto industry. Some reports have characterized this as a “crypto crackdown,” while some observers view it as a “step toward consistency.”
As the deadline nears, we unpack what the FSMA entails, how it affects crypto businesses, and whether it marks a crypto policy shift in Singapore.
How does the FSMA impact crypto businesses in Singapore?
The FSMA’s licensing regime broadens the territorial scope of crypto regulation in Singapore. Under the PS Act, only crypto firms serving Singapore customers needed a license. The FSMA extends licensing obligations to Singapore-incorporated crypto firms, as well as Singapore-based individuals and partnerships, regardless of customer location.
This change carries several implications:
- Crypto businesses incorporated in Singapore may fall within scope, even if they target only overseas clients.
- Entities must now evaluate their licensing obligations based on their presence in Singapore, not just customer location.
- Crypto businesses that previously operated from Singapore while serving only offshore clients — assuming they could avoid local licensing — must now either get licensed, or stop operating from Singapore. Since MAS is not minded to grant FSMA licenses, the only route to licensing is via other existing regimes such as the PS Act.
Is Singapore changing its position on crypto?
The short answer? Not really.
The DTSP licensing requirements simply give operational effect to a long-articulated policy stance. As Minister Alvin Tan explained during his April 2022 parliamentary speech on the legislation:
“MAS is committed to facilitating the growth opportunities presented by digital finance, and the cheaper and more convenient services it often brings for consumers, while guarding against new risks. These digital transformations could disrupt and challenge existing regulatory frameworks which were designed for more traditional forms of financial transactions and services. For example, digital token service providers could easily structure their businesses to evade regulation in any one jurisdiction, as they operate mainly online. We could be exposed to reputational risks brought by DT service providers created in Singapore, and which provide services relating to virtual assets such as Bitcoin outside Singapore. The [legislation] seeks to mitigate such risks by licensing these players and imposing AML/CFT requirements on them.”
“Contrary to some reports, the implementation of DTSP licensing requirements is neither sudden nor unexpected,” noted Rooke. “In fact, a good number of crypto firms have already assessed their position and made preparations over the last few years.”
Ang emphasized: “The DTSP framework is aimed at a specific business model designed to circumvent regulation. Firms operating outside of that model should not be unduly concerned.”
What does the implementation of FSMA mean for Singapore’s crypto hub?
The reality on the ground has been mixed. Bloomberg reported that two major unlicensed crypto exchanges are reorganizing their Singapore teams, including moving staff to other jurisdictions. However, local news outlet CNA reported that staff from another major unlicensed crypto exchange have “not been significantly affected.” In a June 6 clarification, MAS said that it had engaged the “small number” of providers who were likely to be affected, to “clarify [its] policy position and to discuss their plans for an orderly wind-down of the activity.” These actions reflect MAS’ consultative approach to regulation, said Ang. “MAS typically engages industry stakeholders in advance of any change. Its goal is to avoid surprises and implement rules with a clear understanding of their potential impact.”
But the recent panic among industry players could suggest a need for stronger engagement and clearer messaging. “MAS has emphasized in its various comments and clarifications that the new rules have been a long time coming. However, it is clear from the industry response that something has been lost in translation,” opined Yeoh.
“To help allay concerns, a clarification such as ‘We understand that there will be significant impact on firms who have been caught off guard and will provide further clarification to them as they transit the relevant parts of their businesses out of Singapore,’ could have gone a long way.”
“Beyond the substance of the rules, perception can play a role,” added Yeoh. “Some firms could be making decisions to move out because they perceive Singapore as tightening its rules for crypto, even if they are not affected by the new FSMA rules.”
Still, we are unlikely to see an exodus of crypto firms from Singapore on June 30. “Regulation is only one facet of Singapore’s competitiveness as a crypto hub,” Rooke commented. “The industry is not going to decamp en masse overnight because of a single legislation.”
What lies ahead
MAS has made it clear: it will not stand for crypto firms using Singapore as a base to evade regulation while servicing other markets.
But the FSMA’s actual impact on any given firm is highly fact-dependent. As Yeoh notes: “The real winners, as always, will be those firms that spend the time to do due diligence, to understand their operating context, and who focus on the signal and not the noise.”
In that sense, Singapore’s regulatory direction may not have changed — but for those in the industry, understanding and anticipating how it is applied has never been more important.
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