Regulatory Updates: Singapore’s New Digital Token Service Provider Regime - Deadline for Compliance by 30 June 2025
Jun 10
5 min read
Key Takeways:
New Deadline: The Monetary Authority of Singapore has set a deadline of June 30, 2025, for digital token service providers (which includes individuals, partnerships or Singapore companies) (“DTSPs”) to cease offering “digital token services” outside of Singapore, unless they are licensed under the new guidelines.
Broad Scope of Regulation: The definition of digital token services is extensive, covering everything from dealing in and exchanging tokens to safeguarding them and providing related advisory services, and is more fully described in the First Schedule of FSM Act.
Impact on Crypto Firms: All individuals, partnerships, and Singapore corporations should assess their operations and discuss with the SCG Advisory team as to whether you fall under the definition of providing “digital token services”. If there is any uncertainty, we would highly recommend that you obtain a legal opinion to ensure you fully comply with the new rules.
Who Is Affected?
The new regime applies to individuals, partnerships, or companies that:
operate from a place of business in Singapore — including home offices, virtual setups, or co-working spaces; or
are formed or incorporated in Singapore, regardless of where clients are located.
Importantly, servicing only overseas clients does not exempt an entity from the licensing requirement. The mere presence or incorporation in Singapore brings you within regulatory scope.
Note that where an individual is an employee of a foreign incorporated company that provides DT services (as defined below) outside Singapore, work done by the individual as part of his or her employment with the foreign-incorporated company would not, in itself, attract a licensing requirement under section 137(1) of the FSM Act.
Broad Scope of “Digital Token Services” under Singapore’s FSMA
The FSMA introduces a broad and expansive definition of “digital token services”, capturing a wide spectrum of activities associated with digital tokens. Entities conducting such services from Singapore — or incorporated in Singapore — even if serving only overseas clients, may now fall under the DTSP regulatory regime.
What Constitutes a Digital Token Service?
Under Part 9 and the First Schedule of the FSMA, the term “digital token services” (“DT services”) encompasses any of the following activities, unless specifically excluded by the MAS:
Dealing in digital tokens (“DTs”), whether as principal or agent;
Facilitating the exchange of DTs, including between different types of tokens;
Accepting DTs for transmission, from one wallet to another, whether within or outside Singapore;
Arranging for the transmission of DTs across accounts or wallets globally;
Inducing or attempting to induce others to buy or sell DTs, whether for money or other tokens;
Safeguarding DTs, where the provider has control over the tokens;
Executing customer instructions involving DTs, again where the provider has control;
Safeguarding a DT instrument, where the provider controls tokens associated with that instrument;
Executing instructions relating to DT instruments, involving control over associated tokens; or
Providing advice or research related to the offer or sale of DTs, whether through direct communication, publications, or research reports—across all media formats (electronic, print, etc.).
Your business may be considered to be providing regulated DT services if it is engaged in any of the following activities — even if your clients are entirely based overseas:
Operating centralized or decentralized exchanges (DEXs), including automated market-making protocols, launchpads, and trading platforms;
Providing custodial or wallet services for digital assets;
Brokering digital token transactions, such as facilitating fiat-to-token or token-to-token trades;
Engaging in market-making or liquidity provision in the digital asset markets; and/or
Delivering advisory, research, or technical services that directly facilitate the offer, sale, or exchange of DTs.
Clarifying the Exclusions: What Is Not Considered a Digital Token Service under Singapore’s FSM Act
Part 2 of the First Schedule, however, provides important exclusions that clarify when a business or individual may fall outside the scope of regulation.
Excluded Technical Services
Entities that purely support digital token activities through technical infrastructure, without custody or control of funds or tokens, are not considered to be offering DT services. Specifically, the following functions are excluded:
Technical service providers that do not at any time possess or control digital tokens or fiat currency in connection with a DT service. Examples include:
Data processing or storage services;
IT security, trust or privacy services;
Data or entity authentication services;
General IT support services;
Network communication providers; and
Maintenance and provision of devices or terminals used in connection with digital token services.
This means that software developers, infrastructure providers, and technology companies whose roles are strictly supportive in nature (e.g. publishing code, offering non-custodial wallets, or maintaining blockchain infrastructure) are not required to be licensed, provided they do not facilitate or engage directly in financial transactions involving digital tokens.
The following additional exclusions also apply:
Central banks or financial institutions providing DT services exclusively in connection with central bank digital tokens (CBDTs) are excluded from regulation under the DTSP regime; and
Limited purpose digital payment token (LPDPT) services are similarly carved out, such as those used within closed-loop ecosystems (e.g. loyalty points or in-game currencies with restricted transferability and usability).
Key Deadline: 30 June 2025
Entities falling within the scope of a DTSP must:
apply for a licence with MAS, OR
cease all covered activities targeting overseas markets by 30 June 2025, unless already exempted.
MAS has made it clear that Singapore-incorporated entities cannot use the jurisdiction merely as a regulatory or tax base while conducting global digital token activities.
Strategic Implications for Crypto Firms
The new framework signals Singapore’s commitment to strengthening AML/CFT controls and user protection, even for services directed at non-residents. Firms must now reassess their operating model, jurisdictional presence, and legal structure.
If your business:
has operational or legal ties to Singapore;
serves international crypto clients; or
offers any form of digital token service,
then it is critical to seek legal review and evaluate restructuring or licensing options ahead of the deadline.
How SCG Advisory Can Help?
Given the nuanced distinctions in the FSMA, we recommend all technology providers, crypto startups, and Singapore-incorporated entities carefully assess their business activities to determine whether they fall within the regulated perimeter.
Our team at SCG Advisory is actively assisting clients to:
provide regulatory gap assessments to determine whether your activities fall within the scope of the DTSP regime;
obtain legal opinions on whether your services qualify for exemption; and
provide guidance on licensing (including preparing MAS licence applications) or restructuring if necessary (e.g. exploring offshore restructuring options in more favourable jurisdictions).
Contact us today for a confidential consultation to ensure your business remains compliant and strategically positioned under Singapore’s evolving digital asset framework.
If you have operation in Singapore providing crypto-related services and are unsure whether your business falls within the licensing requirements under the FSM Act, contact us today at contact@synergyconsulting.io and learn how we can support your business in navigating the current regulatory complexities.
Key Contacts:
Lisa Wu
Director
Felix Wang
Principal Consultant
Disclaimer: This article is provided for general informational purposes only and should not be construed as legal, tax, investment, or financial advice. It does not create, and is not intended to create, any client-attorney or advisory relationship. The information contained herein is not a substitute for tailored advice from a qualified legal, tax, or financial professional based on your specific circumstances. Readers are strongly advised to seek independent, professional guidance before making any decisions or taking any action based on the contents of this publication.
