MAS Crypto Oversight 2025: What the New Rules Mean for Digital Token Services

In June 2025 the Monetary Authority of Singapore (MAS) announced a sweeping overhaul of its crypto oversight regime. The move caps new licensing to “extremely limited circumstances”, tightens anti‑money‑laundering (AML) and counter‑terrorism financing (CFT) requirements, and forces every crypto firm that operates from Singapore to obtain a Digital Token Service Provider (DTSP) licence - even if its customers live abroad. If you run a crypto platform, a DeFi protocol, or a stablecoin project, you need to know what the new framework demands, how it differs from the pre‑2025 environment, and whether staying in Singapore is still viable.

Why MAS Went From Crypto‑Friendly to Crypto‑Strict

MAS has long marketed Singapore as a trusted financial hub. Over the past decade that reputation attracted dozens of crypto startups that used a Singapore‑registered entity to gain legitimacy while serving global users from low‑regulation jurisdictions. By early 2025 MAS officials warned that this “regulatory arbitrage” threatened the city‑state’s credibility. In a June 6 press release the authority said it would only grant DTSP licences in “extremely limited circumstances” because it could not verify that existing AML/CFT controls met international standards. The hard deadline for compliance was set for 30June2025 - no extensions, no grace period.

Legal Backbone: The Financial Services and Markets Act 2022

The new regime sits on Financial Services and Markets Act (FSMA) Section137, which gives MAS extraterritorial power over any Singapore‑based corporation or individual that offers digital token services, regardless of where the servers, funds, or users are located. In practice this means a platform that only serves European investors but is incorporated in Singapore must still apply for a DTSP licence, install a local compliance officer, and meet Singapore‑level AML/CFT standards.

Who Needs a DTSP Licence?

MAS defines a DTSP as any person that:

• Offers a digital token exchange, trading, or custody service;
• Issues or redeems tokenised assets;
• Provides payment services using crypto‑based tokens.

If your business falls into any of these buckets you are now a Digital Token Service Provider (DTSP) and must be licensed.

Key Licensing Requirements

MAS published a detailed checklist in June 2025. The most critical items are:

1. Capital Thresholds: Minimum paid‑up capital of SGD1million for exchange services, SGD500,000 for custodial services, and SGD250,000 for token‑issuers.
2. Local Compliance Officer: A Singapore‑resident with at least five years of AML/CFT experience must be appointed. Salary packages typically range from SGD150,000 to SGD250,000 per year.
3. Annual Independent Audits: External auditors must verify that capital, risk, and AML controls remain compliant.
4. AML/CFT Controls: Firms must adopt a risk‑based approach, conduct customer due‑diligence (CDD) and ongoing monitoring, and file suspicious transaction reports with MAS.
5. Travel Rule Compliance: Under Notice PSN02 (Travel Rule), any transaction above SGD1,500 must include the sender’s and receiver’s name, ID number, and account details. This data must be shared with the counter‑party’s designated compliance officer.
6. Consumer Protection: Clear risk disclosures, suitability assessments, and a ban on credit‑card purchases of crypto assets.
7. Stablecoin Requirements: Stablecoins must maintain a “high degree of value stability” and be backed by transparent reserves, as outlined in MAS’s 2023 stablecoin framework.

Failure to meet any of these obligations can result in fines up to SGD200,000, imprisonment, and an immediate cease‑and‑desist order.

Cost and Implementation Challenges

Implementing the new regime is not cheap. A typical Travel Rule integration costs between SGD50,000 and SGD200,000, depending on transaction volume. Adding a compliance officer and upgrading AML software can add another SGD100,000‑250,000 in annual operating expenses. Deloitte’s May 2025 fintech cost analysis estimates that total compliance outlays will increase overall operational costs by 25‑40% for most DTSPs.

Beyond money, firms face a talent crunch. The specialised compliance talent pool in Singapore is limited, driving up salaries and creating recruitment bottlenecks. According to a 2025 salary survey, senior AML officers command average packages of SGD200,000 per year.

Industry Impact: Exodus or Evolution?

The hard deadline has already triggered a wave of restructuring. Blockdata’s June2025 market analysis predicts only 15‑20 of the roughly 200 provisional licence holders will stay fully compliant after 30June2025. Many firms have chosen to relocate to jurisdictions like Switzerland or the United Arab Emirates, where licensing remains open and costs are lower.

LinkedIn workforce analytics recorded a 37% drop in crypto‑related job postings in Singapore during Q12025 compared with Q42024. Meanwhile, existing licensed firms report a 30‑45% rise in compliance‑related overheads. The net effect is a smaller, higher‑quality crypto ecosystem that aligns with MAS’s stated goal.

Comparison: Pre‑2025 vs. Post‑2025 DTSP Landscape

Practical Steps for Crypto Firms Facing the New Rules

If you’re still operating in Singapore, follow this quick checklist to avoid the steep penalties:

1. Confirm your business definition matches a DTSP under the MAS criteria.
2. Prepare a capital injection plan to meet the minimum threshold for your service type.
3. Recruit or relocate a qualified AML/CFT professional to serve as the Singapore‑based compliance officer.
4. Engage a reputable auditor early to schedule the first annual audit before 30June2025.
5. Integrate Travel Rule software (e.g., Notabene, Chainalysis) and test data exchange for transactions above SGD1,500.
6. Update customer onboarding flows to include risk disclosures, suitability questionnaires, and a ban on credit‑card purchases.
7. Document your stablecoin reserve strategy if you issue or support stablecoins, referencing MAS’s November2023 framework.

Document every step, keep records in a secure, Singapore‑based data centre, and submit the DTSP licence application through MAS’s online portal. Remember, MAS does not grant extensions - the clock stopped on 30June2025.

Looking Ahead: Possible Tweaks and the Future of Singapore Crypto

MAS has hinted at further guidance on DeFi protocols and stablecoin arrangements later in 2025. While the current regime is already among the world’s strictest, the regulator may tighten reporting requirements or introduce a sandbox for “high‑quality” projects that can demonstrate robust governance.

For the broader ecosystem, the key question remains whether the high‑bar approach will preserve Singapore’s reputation as a trusted hub or drive innovators to friendlier jurisdictions. Dr. Jane Lim of the Asian Fintech Institute warned that “overly restrictive regulation could permanently diminish Singapore’s role in the global crypto ecosystem,” while MAS officials argue a “smaller, higher‑quality industry better serves Singapore’s long‑term interests.” Your strategic decision today will shape where you stand when the next wave of regulation arrives.