Crypto Exchange Licensing Requirements in Singapore 2025

On June 30, 2025, Singapore shut the door on crypto exchanges that thought they could operate from its shores while serving only overseas clients. No more loopholes. No more gray zones. If you’re running a crypto exchange and you’re based in Singapore, you now need a license - period. The Monetary Authority of Singapore (MAS) didn’t ask nicely. It didn’t give a grace period. It just changed the rules overnight, and thousands of businesses had to scramble to comply or shut down.

What Changed in June 2025?

Before June 2025, a crypto company could set up its headquarters in Singapore, hire local staff, and use Singapore’s banking infrastructure - but if it only served customers outside Singapore, it didn’t need a license. That’s how some firms slipped through the cracks. They weren’t breaking any laws, exactly. They were just exploiting a gap. The MAS called it regulatory arbitrage. And they put an end to it.

The new framework, called the Digital Token Service Provider (DTSP) regime, is part of the Financial Services and Markets Act (FSMA) that took full effect on June 30, 2025. It’s not an update. It’s a complete overhaul. Now, any company that offers crypto trading, custody, or exchange services - even if it has zero local customers - must get licensed by MAS. There’s no exception. No exemption. No ‘we’re just a tech startup’ excuse.

The Two License Tiers You Need to Know

Singapore doesn’t have one license. It has two, based on how big you are and how much money you move.

• Standard Payment Institution License: For businesses processing up to SGD 3 million in transactions per month. You need at least SGD 100,000 in paid-up capital. This is for smaller exchanges, peer-to-peer platforms, or crypto payment processors.
• Major Payment Institution License: For anyone moving more than SGD 3 million monthly. You need SGD 250,000 in capital, plus deeper compliance, real-time transaction monitoring, annual external audits, and stricter internal controls.

There’s also a third category - Exempt Payment Service Provider - but that’s only for very narrow activities like crypto-to-crypto swaps under SGD 10,000 per transaction. Most exchanges don’t qualify.

The difference between the two isn’t just about money. The Major License demands full AML/KYC systems that match banks. You need to track every deposit, every withdrawal, every wallet address change. You need to flag unusual behavior. You need to report suspicious activity within 24 hours. And you need to prove you can do it consistently - not just once, but every month, every quarter, every year.

What MAS Actually Demands

Getting a license isn’t about filling out a form. It’s about proving you’re built like a bank. MAS doesn’t just want your business plan. They want your entire operating system.

• AML/KYC Policy: You must verify every customer’s identity with government-issued ID, proof of address, and biometric checks if needed. You can’t just ask for a selfie and a passport scan. You need to cross-check against global sanctions lists and PEP databases.
• Transaction Monitoring: Your system must detect patterns like rapid deposits and withdrawals, layering, or structuring. If someone sends $50,000 in 10 different Bitcoin addresses and pulls it out in Ethereum within an hour - your system must flag it.
• Internal Risk Controls: You need documented procedures for everything: how you store private keys, how you handle customer funds, how you respond to hacks, how you train staff on fraud.
• Annual Audits: Every year, an independent third party must audit your financials, your compliance systems, and your security protocols. MAS will review the report. They’ll ask questions. If they find gaps, your license is at risk.
• Capital Proof: You can’t just say you have SGD 250,000. You need bank statements, audited financials, or a letter from a licensed financial institution confirming you have the funds available.

This isn’t theoretical. In 2023, a Singapore-based exchange got fined $1.2 million for failing to monitor transactions from a wallet linked to a darknet market. The firm claimed they didn’t know. MAS said ignorance isn’t a defense.

How Long Does It Take?

If you’re a small operator with clean records and solid documentation, you might get your Standard License in 3 to 6 months. That’s if you hire a local compliance expert who’s done this before.

For a Major License? Plan for 6 to 12 months. Why so long? MAS reviews every document line by line. They’ll ask for clarifications. They’ll request revisions. They’ll come back with 20 pages of follow-up questions. One firm spent eight months just getting their KYC workflow approved.

And there’s no shortcut. You can’t pay extra to move faster. MAS doesn’t offer fast-track options. If your application is incomplete, it gets rejected - and you start over.

How Does Singapore Compare?

Some countries ban crypto. Others let anyone set up shop. Singapore sits in the middle - strict, but fair.

• EU (MiCA): Has similar rules, but gives firms years to adapt. Singapore gave zero grace period.
• USA: Patchwork of state rules. You might need 40 licenses just to operate nationally. Singapore gives you one national license.
• Switzerland: Requires millions in capital. Singapore’s SGD 250,000 is far more accessible.
• Hong Kong: Just launched its own regime in 2024. Singapore still leads in clarity and enforcement.

Singapore’s goal isn’t to be the cheapest. It’s to be the most trusted. That’s why it’s becoming the go-to base for institutional crypto investors who need regulatory certainty.

Who’s Getting Hit the Hardest?

Small exchanges that thought they could fly under the radar are disappearing. Many were retail-focused, with low capital and minimal compliance teams. When the deadline hit, they either folded or moved to jurisdictions with looser rules - like the UAE or El Salvador.

Even some well-funded startups struggled. One Singapore-based platform, which had raised $15 million in venture funding, couldn’t pass MAS’s audit because their transaction monitoring tool couldn’t flag cross-chain wash trading. They spent $400,000 on a new system - and still didn’t get approved on the first try.

The biggest surprise? Many firms that thought they were safe because they only served overseas customers got caught. MAS doesn’t care where your users live. If your servers are in Singapore, you’re under their jurisdiction.

What Happens If You Don’t Apply?

The consequences are severe. MAS doesn’t just shut you down. They make examples.

• Fines up to SGD 1 million for unlicensed operations.
• Personal liability for directors and compliance officers.
• Public naming and shaming on MAS’s website.
• Bank accounts frozen - even if you’re not doing anything illegal.

In 2024, a crypto firm that claimed to be ‘just a software provider’ was fined $800,000 after MAS found it was actually running a trading platform. The CEO had to resign. The company’s directors were barred from holding any financial licenses in Singapore for five years.

Is It Worth It?

For big players, yes. Singapore’s license is a gold stamp. It opens doors to institutional investors, banks, and global partners who won’t touch unregulated platforms. Exchanges like Bybit and Bitget now use their Singapore licenses to market themselves as ‘MAS-regulated’ - and it’s working.

For small operators? It’s a high wall. The legal fees alone can cost $100,000-$300,000. You need full-time compliance staff. You need upgraded tech. You need ongoing audits. If you’re making $500,000 a year in revenue, you might spend more on compliance than you earn.

The reality? Singapore isn’t trying to be the biggest crypto hub. It’s trying to be the safest. If you’re building a business that’s transparent, secure, and compliant - you’ll thrive. If you’re trying to cut corners - you won’t survive.

What’s Next?

MAS has said they’re not done. They’re already looking at DeFi protocols, NFT marketplaces, and stablecoin issuers. Next on the list? Tokenized assets. The message is clear: if it touches finance, it touches MAS.

The message to operators? Get compliant now. Don’t wait for the next announcement. Don’t hope the rules will soften. They won’t. Singapore’s crypto future isn’t wild and free. It’s clean, controlled, and carefully regulated.