Singapore Moves to Block Crypto Firms Serving Only Overseas Customers Over Money Laundering Risks

Singapore is set to ban multiple crypto businesses that cater exclusively to foreign clients, with possible higher money laundering or financial crime risks.

These ‘Digital Token Service Providers (DTSPs)’ based in Singapore will be required to obtain a license issued by the Monetary Authority of Singapore (MAS) from June 30th, 2025.

According to MAS, the licensing requirements have been raised, and it will no longer grant licenses randomly.

The regulator emphasized that companies that deal with capital market goods and digital payment tokens are subject to the law. These business structures increase the possibility of illicit activities like money laundering.

When their regulated activities are primarily conducted overseas, MAS cannot effectively supervise those individuals.

MAS further added that unlicensed Digital Token Service Providers (DTSPs) will have to stop offering their services to clients in other countries as soon as the new rules take effect.

These may contain tokenized assets, stablecoins, and cryptocurrencies. The new regime will be implemented under the Financial Services and Markets Act 2022.

In a statement released on May 30, MAS responded to public comments by outlining the higher risks of money laundering and terrorism funding for DTSPs that exclusively serve overseas customers.

Read More:

• MAS Fines Swiss-Asia Financial Services S$2.5 Million For Breaking AML Laws
• Fedpol Chief Calls for Reversal of Burden of Proof in Money Laundering Cases
• EU and US Lift Economic Sanctions on Syria to Support Recovery

The cross-border and internet-based nature of these services has exposed these firms to the potential misuse for illegal activities like money laundering, which could harm the international reputation of Singapore.

Firms that serve customers within Singapore are already regulated and may continue offering services to foreign clients under the new rules.

The new regulations do not apply to firms that are into dealing with utility or governance tokens, said MAS.

MAS also confirmed it had contacted relevant parties potentially subject to the new rules to clarify the regime and share an “orderly wind-down” of relevant services.

As per the MAS publication, the regulator noted that only a small number of firms are expected to be impacted by such a sort of change.