Singapore has introduced strict new rules that could change the future of its crypto industry. The country's financial regulator is now requiring all crypto businesses that are based in Singapore and serve overseas customers to apply for a license by June 30, 2025. If they don’t, they must shut down their international operations or face serious penalties—up to three years in jail and a fine of USD 200,000.
No exceptions or extensions
The new rule leaves no room for flexibility. There are no grace periods, exceptions, or delays. Any crypto startup based in Singapore, no matter how small, must comply if it provides services to clients outside the country.
Closing the loopholes
This change is part of updates made under Singapore's Financial Services and Markets Act. The goal is to stop companies from using their Singapore base to serve foreign customers without following local rules. The government wants to ensure stronger control over businesses that could be involved in money laundering or other financial crimes.
Getting a license is now extremely hard
While the option to apply for a license still exists, the chances of approval are very low. Singapore has said licenses will only be granted under "very limited circumstances," and the process is strict. This includes proving strong anti-money laundering systems and having clear risk controls.
Crypto companies look for safer ground
Because of these challenges, many crypto startups are now looking to move their operations to more welcoming places. Popular destinations include:
- Dubai, which offers tax benefits and clear crypto regulations
- Hong Kong, known for its business-friendly approach
- Mauritius, Seychelles, and the British Virgin Islands, which offer easier setups for crypto firms
Several well-known crypto companies have already started moving their operations out of Singapore. Others are creating new entities in offshore locations to avoid breaking the new rules.
Not all are affected
Companies that only serve customers in Singapore are not impacted by the new rules. However, even small involvement with foreign clients triggers the new requirements.
Experts warn of a compliance cliff
Many business experts are calling this a “compliance cliff,” where companies must make a decision quickly. Either apply for a difficult license, shut down overseas services, or relocate before the deadline.
A big shift in the crypto world
This move shows that Singapore wants to stay a respected financial center and is willing to lose some startups in exchange for higher safety and control. The country is choosing tight regulation over fast growth in crypto.
At the same time, Dubai and Hong Kong are becoming popular new homes for crypto businesses. These cities offer better conditions and clear rules, making it easier for startups to survive and grow.