Singapore’s Crypto Crackdown: Where Will Firms Relocate?

Singapore’s Monetary Authority (MAS) has issued a strict directive: by June 30, 2025, all Singapore-incorporated crypto firms must halt overseas digital token services unless they secure a license under the Financial Services and Markets Act of 2022 (FSM Act). This move, part of a broader effort to tighten oversight, targets Digital Token Service Providers (DTSPs) and imposes stringent anti-money laundering (AML) and counter-terrorist financing (CFT) requirements. Licenses will be granted only in exceptional cases, leaving many firms with little room to maneuver. Non-compliance risks hefty fines of up to SGD 250,000 ($200,000) and potential imprisonment of up to three years, pushing companies to rethink their operational strategies.

With Singapore’s regulatory environment tightening, crypto firms are eyeing new destinations to maintain global operations. Dubai emerges as a prime choice, offering clear tax policies, robust infrastructure, and a strategic timezone bridging East and West. Hong Kong is another contender, particularly for Asia-focused projects, with its regulated framework and proximity to mainland China’s financial ecosystem. Jurisdictions like the British Virgin Islands (BVI) and Seychelles remain attractive for their regulatory flexibility, ideal for complex token operations. Mauritius is gaining traction among custodians and API developers, providing a haven ahead of stricter EU regulations. These locations offer varying degrees of regulatory leniency and operational advantages, reshaping the global liquidity map.

The new rules will likely affect centralised exchanges (CEXs) operating in Singapore, particularly those serving overseas markets without a license. The MAS’s stance assumes Singapore-based firms, including CEXs, brokers, market makers, and custody providers, are subject to local oversight regardless of their primary business focus. Firms exempt under existing laws like the Payment Services Act or Securities and Futures Act may continue operations, but others face a stark choice: secure a rare license or exit Singapore’s jurisdiction. Many are expected to restructure operations or relocate to avoid penalties, potentially sparking a wave of migrations that could redefine the crypto industry’s global footprint by mid-2025.