Singapore Confirms Near-Ban on Digital Token Services for Overseas Customers Only

Crypto companies are almost no longer allowed to offer services to foreign customers

The Monetary Authority of Singapore (MAS) has announced that crypto Companies that only serve foreign customers will need a permit from June 30. However, this permit will hardly ever be issued. This effectively means a near ban on foreign-only digital digital token services from Singapore.

What does the new rule entail?

• Crypto companies that exclusively offer digital token services to customers outside Singapore will be required to obtain a license from June 30.

• MAS will grant these licenses “in very limited cases” due to regulatory concerns and money laundering risks.

• Unlicensed companies must cease their activities.

Why this measure?

MAS says it is difficult to properly monitor foreign companies and the risks of money laundering and financial abuse are too great. Due to the high requirements, it is almost impossible for foreign-only crypto companies to operate legally from Singapore.

Impact on the crypto market

• The news led to panic and adjustments in the sector.

• For example, WazirX, a crypto exchange serving Indian customers but based in Singapore, is moving its operations to Panama.

• This could be the beginning of an outflow of foreign crypto companies from Singapore.

What still applies and what does not?

• Crypto companies serving customers within Singapore will continue to be regulated as before.

• Services using utility or governance tokens fall outside the new licensing requirements and remain unregulated.

• This is an extension of regulation from local to also foreign services.

What does this mean for the future?

Singapore sets a strict tone and wants to keep a tighter eye on crypto activities from the country, especially to prevent financial crime. This could encourage other countries to introduce similar rules. For foreign crypto companies, Singapore becomes less attractive as a base.

Summary

Singapore's MAS is almost banning crypto services that only cater to foreign customers by making it nearly impossible to obtain a license for them. This will significantly tighten regulations and could lead to the departure of foreign crypto platforms from Singapore.

Frequently Asked Questions

Why is Singapore introducing these new rules?
To mitigate risks such as money laundering and improve oversight of foreign-only crypto companies.

What happens to crypto companies that only serve foreign customers?
They must have a permit from June 30, but this is usually not issued. Without a permit they must stop.

Does this impact companies operating within Singapore?
No, businesses serving customers within Singapore will remain regulated as before.