Singapore Tightens Crypto Regulations: New Licensing Requirements for Custodial Services and More

Singapore has implemented new licensing requirements for entities offering custodial and other cryptocurrency-related services, expanding the regulatory scope to include activities such as cross-border money transfers and facilitating crypto transactions between accounts and exchanges. The changes, originally passed in parliament in 2021 under amendments to the Payment Services Act, were enacted by the Monetary Authority of Singapore (MAS) on Tuesday, aiming to provide regulatory clarity and impose user protection and financial stability measures on digital payment token (DPT) service providers. These amendments mandate actions such as segregating customers' assets in trust accounts, maintaining proper records, and implementing effective systems and controls. Entities engaged in crypto-related activities under the Payment Services Act must initiate a transition process within 30 days and submit a licence application within six months to continue operations temporarily. Compliance with anti-money laundering and counter-financing of terrorism requirements will be attested by an external auditor within nine months, failing which entities would have to cease operations, as outlined by the MAS.