Singapore MAS 2026 Crypto Crackdown: Payment Token Rules and VASP Relocation Playbooks

⚠️ URGENT REGULATORY WARNING

If you are a Singapore-incorporated crypto company serving overseas customers, you must obtain an FSMA Part 9 DTSP license or shut down regulated activities by 30 June 2025.
As of December 2025, firms have approximately 6 months left to comply or exit Singapore completely.

Singapore’s crypto-friendly image is changing fast.

For years, the city-state positioned itself as Asia’s most credible digital asset hub. Clear rules under the Payment Services Act (PSA) attracted exchanges, wallet providers, brokers, and Web3 startups from across the world. Many firms incorporated in Singapore while serving only overseas users.

Between 2020 and 2024, more than 400 crypto companies were incorporated in Singapore. Industry estimates suggest 60–70% of these firms never served Singapore residents at all.

That era is ending.

With the Monetary Authority of Singapore (MAS) tightening oversight through 2025 and into 2026, overseas-facing crypto firms incorporated in Singapore are now under direct regulatory pressure. Licensing doors are narrow, timelines are strict, and relocation has shifted from a contingency plan to a strategic necessity.

MAS’s position is clear: Singapore wants to be a regulated crypto hub for legitimate businesses serving Singapore markets – not a flag of convenience for offshore operations.

This blog breaks down what changed, what did not change, and how VASPs are responding through structured relocation playbooks.

Bottom Line Up Front (BLUF)

From 30 June 2025, any Singapore-incorporated company acting as a Digital Token Service Provider (DTSP) – even if it serves only overseas clients – must either:

• Secure a Part 9 license under the Financial Services and Markets Act (FSMA), or
• Cease regulated crypto activities

MAS has stated clearly that such licenses will be granted only in extremely limited circumstances, mainly due to cross-border AML and terrorism financing risks. No grace period was offered.

MAS is responding to FATF pressure after Singapore appeared on enhanced monitoring lists for concerns about how offshore crypto firms were using Singapore registration without proper oversight.

There is no broad reclassification of payment tokens, but the expanded scope of regulation now captures many offshore business models. As a result, VASP relocation to jurisdictions like the UAE has become a practical response for business continuity.

Translation:

If you incorporated in Singapore assuming you could avoid regulation by serving only foreign customers, that loophole is now closed.

Key Terms in Singapore’s Crypto Regulation

Digital Payment Token (DPT)

Cryptocurrencies such as Bitcoin, Ethereum, and certain stablecoins that function as a medium of exchange. These are regulated under the PSA when services target Singapore users.

Think of DPTs as:
Crypto assets used to pay, transfer value, or settle transactions.

Typically includes:
BTC, ETH, USDT, USDC, BNB

Typically excludes:
Pure utility tokens, loyalty points, NFTs with no payment function, governance-only tokens

Digital Token Service Provider (DTSP)

An entity providing services involving digital tokens, including trading, custody, transfer, or facilitation – whether for payment tokens or other regulated digital assets.

You are likely a DTSP if you:

• Run a crypto exchange
• Provide custody or wallet services
• Facilitate crypto buying, selling, or transfers
• Act as a broker or intermediary
• Match orders or arrange transactions

Even if you never hold customer funds, facilitating crypto activity can trigger DTSP status.

Virtual Asset Service Provider (VASP)

A FATF-defined global term covering exchanges, custodians, brokers, and wallet providers.

VASP vs DTSP:

• VASP = international regulatory term
• DTSP = Singapore’s local legal classification

In practice, they cover the same activities.

PSA vs FSMA

• Payment Services Act (PSA): Covers DPT services provided to Singapore users
• Financial Services and Markets Act (FSMA): Extends AML/CFT oversight to overseas-only DTSPs incorporated in Singapore

This distinction is the core reason behind the current crackdown.

What Changed in 2025 – And Why 2026 Matters

Regulatory Timeline

• October 2024: MAS consultation on overseas DTSP regulation
• May 2025: MAS response confirms final framework
• June 2025: No transitional period announced
• 30 June 2025: Enforcement begins

As of December 2025, firms have approximately 6 months to either get licensed or exit Singapore completely.

The biggest shift is territorial scope. Previously, firms could rely on the fact that they did not serve Singapore customers. That protection no longer exists.

Example: CryptoExchange Ltd. is incorporated in Singapore but 100% of its customers are in the Philippines, Indonesia, and Vietnam. Before 2025: Not regulated by MAS. After June 30, 2025: Must have FSMA Part 9 license or shut down completely.

MAS has aligned its approach with FATF guidance to stop regulatory arbitrage – where firms use Singapore’s reputation while operating loosely offshore.

Why MAS did this: Singapore was criticized for being a ‘regulatory haven’ where crypto companies could claim Singapore credibility without actual Singapore oversight. This hurt Singapore’s reputation with global regulators and financial institutions.

Payment Token Rules: No Reclassification, Broader Control

Despite widespread headlines, MAS has not redefined what qualifies as a Digital Payment Token.

MYTH: “Singapore banned crypto.”

REALITY: Singapore expanded who must be regulated, not what counts as crypto.

What has changed is who gets regulated.

Overseas-only crypto trading, brokerage, custody, and facilitation services now fall within MAS oversight if the entity is incorporated in Singapore. Even matching orders or arranging transactions without holding funds may trigger regulation.

Grey-area activities now clearly regulated include:

• Order-matching engines
• P2P facilitation platforms
• White-label exchanges
• Crypto advisory leading to transactions
• Affiliate and referral programs with revenue sharing

Pure utility tokens and governance-only tokens generally remain outside scope, offering relief for some Web3 builders. 

Probable safe zones (subject to confirmation):

• GameFi tokens used only in-game
• DAO governance tokens with no economic rights
• NFT platforms where tokens are not used for payments

Legal confirmation is still essential – these boundaries remain fact-specific.

Impact on Singapore-Based VASPs

For affected firms, the consequences are serious:

• Licensing uncertainty: FSMA Part 9 approvals are rare
• Operational risk: Forced wind-down without a license
• Penalties: Fines, prohibition orders, and potential criminal liability
• Reputation risk: Loss of global trust if operations stop abruptly

This is why many crypto businesses are now executing exit or relocation strategies.

VASP Relocation Playbooks: Strategic Alternatives to Singapore

Relocation is no longer about avoidance – it is about continuity and scalability.

Why VASPs Are Relocating

• Predictable licensing frameworks
• Faster approvals
• Broader activity permissions
• Support for DeFi, RWAs, and tokenization

Preferred Jurisdictions

UAE

• VARA (Dubai): Exchanges, brokers, custodians
• ADGM (Abu Dhabi): Institutional crypto, stablecoins, RWAs
• Strong AML credibility, zero personal tax, global access
  Learn more

Cayman Islands & Bermuda

• Mature VASP regimes
• Institutional acceptance

Seychelles, BVI, Mauritius

• Cost-efficient startup jurisdictions
• Straightforward VASP registration

Step-by-Step Relocation Framework

1. Confirm whether your activities qualify as DTSP
2. Conduct AML and regulatory risk mapping
3. Select jurisdiction aligned with your business model
4. Incorporate new entity and apply for license
5. Transfer users, assets, and IP compliantly
6. Wind down Singapore operations properly

Case Studies: How Firms Are Responding

Several exchanges have already taken this route.

Following regulatory and operational challenges, WazirX pursued restructuring while shifting operational focus away from Singapore. Other platforms have quietly moved to Dubai, securing VARA licenses and resuming international services within months.

The common lesson: early action reduces disruption.

How Cryptoverse Lawyers Support Crypto Firms

At Cryptoverse Lawyers, we assist crypto businesses with:

• Singapore MAS impact assessments
• DTSP wind-down planning
• VASP licensing in UAE, Cayman, Bermuda, and more
• Cross-border restructuring and relocation
• FATF-aligned AML/CFT frameworks

Conclusion: Preparing for the Next Phase of Crypto Regulation

Singapore’s 2026 crypto framework sends a clear signal: credibility now comes with tighter control. While this limits certain models, it also reshapes the global crypto map. Jurisdictions like the UAE are stepping forward as regulated, growth-oriented alternatives.

For crypto firms, the priority is clarity, speed, and structure.

If your business is affected by the Singapore MAS crypto crackdown, now is the time to act. A well-planned relocation can protect operations today and position your firm for long-term expansion.Reach out to Cryptoverse Lawyers for tailored advisory on VASP licensing and global crypto compliance.

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