Before June 30, 2025, some crypto exchanges could operate from Singapore while serving customers overseas-no license needed. That loophole is gone. Now, if you’re running a crypto exchange out of Singapore, even if you only deal with foreign clients, you must get licensed by the Monetary Authority of Singapore (MAS). The rules changed fast. No grace period. No exceptions. And if you didn’t apply in time, you’re no longer allowed to operate here.
Why Singapore Changed the Rules
Singapore didn’t make this move because it hates crypto. It’s because of scandals. The collapse of Three Arrows Capital and Terraform Labs in 2022 sent shockwaves through global markets. Both had ties to Singapore. Neither was properly supervised. And both left investors with massive losses. MAS realized something dangerous: a crypto firm could set up shop in Singapore, use its reputation as a financial hub, and then serve clients in countries with weak rules-while avoiding oversight entirely. MAS made it clear: Singapore won’t be a haven for unregulated crypto operations. The goal isn’t to kill innovation. It’s to protect the country’s financial reputation. As Chengyi Ong from Chainalysis put it, "Financial integrity is a red line."The Two Laws That Control Crypto Licenses
Two laws now govern crypto exchanges in Singapore: the Payment Services Act 2019 (a law that regulates payment services, including crypto transactions) and the newer Financial Services and Markets Act 2022 (a comprehensive overhaul that expanded MAS’s authority over digital asset services). Together, they created the Digital Token Service Provider (DTSP) framework. The DTSP rules cover any business that:- Allows users to buy, sell, or trade digital tokens
- Manages custody of digital assets
- Operates a crypto trading platform
Three Types of Licenses
There are three paths to legal operation under the Payment Services Act:- Standard Payment Institution License - For smaller exchanges. You must process less than SGD 3 million in monthly transactions. Minimum capital: SGD 100,000. You need basic KYC, AML policies, and regular reporting.
- Major Payment Institution License - For larger platforms. Monthly volume exceeds SGD 3 million. Minimum capital: SGD 250,000. You’ll face stricter audits, advanced transaction monitoring, and detailed risk controls.
- Exempt Payment Service Provider - Only for very limited activities, like facilitating small peer-to-peer transfers under strict conditions. No capital requirement, but you must notify MAS and follow tight rules.
What MAS Demands in Your Application
Getting licensed isn’t about filling out a form. It’s about proving you’re a serious, secure, and compliant business. MAS expects:- A full business plan: Your strategy, target market, revenue model, and growth roadmap. No vague statements. Be specific.
- Compliant KYC and AML policies: You must show how you verify every user’s identity, monitor transactions for suspicious behavior, and report red flags to authorities.
- Internal risk controls: How do you protect user funds? What happens if a hack occurs? How do you handle market volatility? You need documented procedures for everything.
- Annual audits: Both internal and external audits are mandatory. MAS will review them.
- Proof of capital: You must show you have the funds to cover operations. This isn’t just a number on paper. MAS checks bank statements, investor commitments, or financial backing.
How Long Does It Take?
There’s no quick path. The timeline depends on your license type:- Standard License: 3 to 6 months with expert help.
- Major License: 6 to 12 months. MAS digs deeper into your systems, team, and financial health.
How Singapore Compares to Other Places
Compared to other major markets, Singapore’s rules sit in the middle:| Region | Minimum Capital | Implementation Speed | Scope |
|---|---|---|---|
| Singapore | SGD 100,000-250,000 | Immediate (no grace period) | Global clients covered |
| Switzerland | CHF 2-5 million | Gradual rollout | Focus on domestic clients |
| European Union (MiCA) | Varies by country | Phased over 2 years | EU-wide standard |
| United States | Varies by state (up to $10M) | Fragmented | State-by-state rules |
| Hong Kong | HKD 1-2 million | Recent launch | Strict, but slower rollout |
Who’s Struggling? Who’s Winning?
Smaller exchanges are feeling the pressure. Many didn’t have legal teams or compliance budgets. Some shut down. Others moved operations overseas. Larger platforms like Coinbase and Binance have adapted. They already had global compliance teams. For them, Singapore’s rules are a hurdle, not a wall. They see value in being licensed: it builds trust with institutional investors and banks. Reddit threads and crypto forums are full of complaints. Users report spending over $50,000 on legal consultants just to submit an application. One exchange founder said it took 11 months and four revisions to get approved. Others gave up after the first rejection. But those who made it? They’re now more stable. Their bank accounts aren’t frozen. Their payment processors still work. They can hire talent without fear of sudden shutdowns.The Future: More Rules, Not Fewer
MAS has signaled this is just the beginning. They’ve said they’ll "generally not issue a license" to firms that serve only overseas clients. That means even if you’re licensed, you can’t ignore your local responsibilities. Expect tighter rules soon:- More frequent reporting (quarterly instead of annual)
- Real-time transaction monitoring
- Stricter rules on stablecoin issuance
- Requirements for insurance coverage on custodied assets
What Should You Do?
If you’re running a crypto exchange from Singapore:- If you haven’t applied yet - stop operating. You’re breaking the law.
- If you’re applying - get a lawyer who’s done this before. Don’t try to do it yourself.
- If you’re planning to launch - start now. The process takes months.
- If you’re based overseas - don’t use Singapore as a "shell" to avoid rules. MAS will find you.
Do I need a license if I only serve foreign customers from Singapore?
Yes. Since June 30, 2025, any crypto exchange operating from Singapore - regardless of where its customers are located - must hold a license from MAS. The previous loophole allowing offshore-only operations has been closed.
What happens if I operate without a license?
You risk criminal charges, fines, and asset freezes. MAS can shut down your operations immediately and refer your case to law enforcement. Even if you’re not based in Singapore, if you’re targeting users there or using local infrastructure, you can still be prosecuted.
How much does it cost to get licensed?
The application fee itself is minimal. But legal, compliance, and audit costs typically range from $30,000 to $150,000 depending on your size and complexity. You also need to maintain minimum capital: SGD 100,000 for Standard licenses, SGD 250,000 for Major licenses.
Can I apply for a license if I’m not a Singaporean citizen?
Yes. MAS doesn’t require ownership by Singaporeans. But you must have a legal entity registered in Singapore, a local compliance officer, and a physical office or registered address here. Foreign companies can apply as long as they meet all regulatory requirements.
Is the DTSP license permanent?
No. Licenses are granted for a fixed term (usually 2-3 years) and must be renewed. MAS can revoke or suspend a license at any time if you violate rules, fail audits, or show signs of financial instability.
