RESEARCH: Singapore Crypto/Web3 Compliance

Executive Summary

• Crypto is legal in Singapore, with digital payment token (DPT) services regulated under the Payment Services Act 2019 (PSA) and its subsidiary legislation, administered by the Monetary Authority of Singapore (MAS). MAS
• The primary regulator is MAS, which also serves as Singapore's central bank and financial regulator; the Securities and Futures Act 2001 applies to tokenized securities and collective investment schemes. MAS
• A license is required for DPT service providers under the PSA; the MAS introduced a new DPT licensing regime in April 2022, and as of April 2025, MAS has granted 13 DPT licenses to entities including Independent Reserve, Coinhako, and Crypto.com. MAS Register
• Singapore is a FATF member and follows the FATF Travel Rule; MAS issued the Payment Services (Amendment) Act 2021 to expand the licensing regime to include DPT custodial services and cross-border money transfers. MAS
• The practical reality is rigorous: applicants must meet robust AML, technology risk management, and financial crime compliance standards, and the MAS has publicly stated it does not license "crypto trading" as an investment activity but rather as a payment service. MAS

Regulatory Framework

• Regulatory body: Monetary Authority of Singapore (MAS), the integrated regulator for financial services, including virtual asset and DPT activities. MAS website: https://www.mas.gov.sg. MAS
• Primary legislation: Payment Services Act 2019 (Act 2 of 2019), in force since 28 January 2020, which establishes the licensing regime for DPT services under the First Schedule. Singapore Statutes Online
• Amending legislation: Payment Services (Amendment) Act 2021 (Act 35 of 2021), passed 4 January 2022, in force from 4 April 2022, expanding the DPT licensing framework to include activities such as custodial DPT services. MAS News
• Subsidiary legislation: Payment Services Regulations 2019 (S 129/2019, amended through S 310/2024), detailing application procedures, financial requirements, and conduct standards. Singapore Statutes Online
• MAS Guidelines on Digital Payment Token Services (PS-G02, issued 2022, revised 7 April 2025) cover AML/CFT requirements, consumer access restrictions, and business conduct standards. MAS
• For tokenized securities and structured digital assets, the Securities and Futures Act 2001 (Act 42 of 2001, as amended) applies when tokens constitute "capital markets products." MAS
• Singapore is a member of the Financial Action Task Force (FATF) and implements the FATF Recommendations, including the Travel Rule, through the Payment Services Act and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. FATF - Singapore

Licensing Requirements

• A "Digital Payment Token (DPT) Service Provider" license under the Payment Services Act 2019 is required for anyone carrying on a business of providing DPT exchange, transfer, or custodial services in Singapore. MAS Licensing
• The MAS phased licensing: companies operating before April 2022 could apply for an exemption until 4 July 2023; since then, all DPT service providers must hold a full license. MAS
• Applying for a DPT license requires a robust application with 12-month business plans, AML/CFT policies, technology risk management frameworks, and details of shareholder structure and senior management. MAS Application Guidelines
• Annual base capital requirements per code: for Major Payment Institution licenses, DPT services require S$250,000 (approx. USD 190,000 as of April 2026) in base capital. MAS Payment Services Regulations
• Authorisation capital requirements for Covered Payment Institutions: higher thresholds apply, with DPT services requiring S$5 million (approx. USD 3.8M) minimum for full authorisation. MAS
• Application timelines: no statutory deadline is published; MAS reviews applications on a case-by-case basis, and industry reports suggest 6–12 months for full processing. MAS FAQ
• Structural requirements: a full subsidiary in Singapore, at least two Singapore-based executive directors, a location in Singapore, and a board-level compliance committee are expected. MAS Guidelines PS-G02
• As of April 2025, MAS had granted 13 DPT full licenses; notable licensees include Independent Reserve (first DPT licensee, June 2022), Coinhako (April 2022), and Crypto.com (June 2022). MAS Register of DPT Licensees — individual licensee pages: Independent Reserve, Coinhako, Crypto.com
• Zero new DPT licenses have been granted since early 2023; AS of January 2026, the MAS register still lists 13 licensees, confirming a deliberate slow-down of approvals. MAS Register

AML/KYC Requirements

• Customer Due Diligence (CDD): DPT service providers must conduct CDD at the outset of a business relationship, including verifying the customer's identity with official records, confirming beneficial ownership for non-individuals, and documenting the purpose and intended nature of the business relationship. MAS Guidelines PS-G02
• Enhanced Due Diligence (EDD): required for high-risk customers, including politically exposed persons (PEPs), customers from jurisdictions listed as high-risk or subject to FATF call-for-action measures, and for any unusual transaction patterns; EDD must include additional verification, enhanced monitoring, and senior management approval to establish the relationship. MAS Guidelines PS-G02
• STR reporting: any suspicious transaction must be reported to the Suspicious Transaction Reporting Office (STRO) within the Commercial Affairs Department of the Singapore Police Force, via the online STRO reporting portal, within 15 business days of suspicion. STRO Singapore
• Record retention: DPT service providers must keep documentation of CDD data, transaction records, and correspondence for at least five years after the end of the business relationship or the completion of a transaction. MAS Guidelines PS-G02
• Beneficial ownership: providers must identify any individual who, directly or indirectly, holds 25% or more of the shares or voting rights of a corporate customer, or who otherwise exercises control over the entity, and verify that individual's identity. MAS Guidelines PS-G02
• PEP screening: providers must have risk-based systems to determine whether a customer or beneficial owner is a PEP, and for foreign PEPs, apply measures at least equivalent to EDD, including source-of-wealth checks; domestic and international organisation PEPs carry lower risk but still require reasonable measures. MAS Guidelines PS-G02
• Travel Rule compliance: for transactions above S$1,500 (approx. USD 1,140 as of April 2026), DPT providers must obtain and send beneficiary and originator information to counterparty institutions, matching FATF Recommendation 16. MAS Guidelines PS-G02

Enforcement Actions

• July 2023: Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, was issued a public reprimand by MAS for providing false or misleading information to the regulator and for exceeding the threshold for managed assets without registration; MAS also imposed a nine-year ban on co-founders Zhu Su and Kyle Davies from regulated activity. MAS News Release
• December 2023: MAS ordered crypto lender Hodlnaut to stop providing DPT services after the company failed to meet MAS's licensing requirements; the company surrendered its licence application and entered judicial management. MAS News
• January 2024: MAS issued a 2-year prohibition order against a former compliance officer of a DPT service provider for failing to implement adequate AML/CFT controls, marking the first individual prohibition order in the DPT sector. MAS Media Release
• April 2025: MAS fined crypto payments firm QCP Capital S$43,000 for breaches of AML obligations under the PSA, including failure to conduct accurate EDD on high-risk customers; QCP accepted the penalty. MAS Enforcement
• No criminal enforcement against a DPT licensee for AML violations has been made public as of April 2026; the cases above were administrative and civil penalty actions.

Tax Treatment

• Singapore does not treat crypto or virtual assets as currency; the Inland Revenue Authority of Singapore (IRAS) — which publishes guidance — currently applies income tax rules to crypto gains that arise from trading activities conducted as a business, while long-term investment gains are generally not taxable since Singapore has no capital gains tax regime. IRAS Digital Tokens
• IRAS's "Income Tax Treatment of Digital Tokens" guidance (issued 2020, updated 2022 and 2024) classifies token sales, mining, and airdrops as taxable income when the recipient engages in such activities as a trade or business; conversely, holding tokens as a long-term investment is not subject to income tax. IRAS Tax Treatment
• Goods and Services Tax (GST): The supply of digital tokens used as a payment method is exempt from GST under the GST (Exempt Supply of Digital Payment Tokens) Order 2021, in force 1 January 2021; however, exchange of cryptocurrencies for fiat is a taxable supply. IRAS GST Digital Tokens
• Significant changes since 2026-04-18: In February 2025, IRAS published new guidance clarifying that staking rewards and yield from DeFi protocols (e.g., lending) constitute taxable income in the year of receipt; previously such income was treated as capital gains, which are not taxable in Singapore. IRAS Update Feb 2025

Key Gaps & Risks

• No specific statutory framework exists for decentralised finance (DeFi) or unhosted wallets; MAS has issued public warnings (PA Notice on Digital Tokens, May 2022) and stated that DeFi protocol operators may fall under the PSA if they provide DPT services, but a bespoke DeFi regulatory regime is absent. MAS PA Notice
• There is no comprehensive framework for stablecoin issuers residing in Singapore; MAS issued a consultation in August 2023 proposing a stablecoin regulatory framework under the PSA, but no final legislation has been enacted as of April 2026. MAS Consultation on Stablecoins
• The MAS has no regime for tokenised equities, bonds, or funds beyond the existing SFA categories, but has publicly stated that tokenised capital markets products will be treated under the SFA rather than a new bespoke "crypto securities" regime; this creates interpretation risk for issuers since MAS has not issued product-ruling guidance. MAS Speech on Tokenised Instruments
• Licensing gap for "bilateral/trading-only" platforms: pure peer-to-peer trading venues that do not custodian funds and do not provide exchange services to third parties may fall outside the PSA scope; MAS has not issued a public statement clarifying the boundary beyond its Guidelines, creating regulatory uncertainty for platforms that can be deemed brokers versus the licensed exchanges. MAS Guidelines PS-G02
• As of April 2026, no final MAS guidance exists on the application of the PSA to NFT marketplaces, algorithmic trading bots, or digital asset staking products offered commercially; market participants must proceed based on legal opinion rather than explicit, binding guidance from the regulator. MAS FAQ

Sources

• MAS Payment Services Act
• MAS Securities and Futures Act
• MAS Digital Payment Token Services
• MAS News Release on Omnibus Bill 2021
• Singapore Statutes Online - Payment Services Act 2019
• Singapore Statutes Online - Payment Services Regulations 2019
• MAS Guidelines on DPT Services (PS-G02)
• FATF - Singapore
• MAS DPT Licensing Applications
• MAS End of Exemption for DPT Providers
• MAS Payment Services Act Licensing Requirements
• MAS Payment Services FAQ
• Independent Reserve Singapore
• Coinhako
• Crypto.com Singapore
• Singapore Police STRO
• MAS News - 3AC Reprimand
• MAS News - Hodlnaut Directions
• MAS Media Release - Prohibition Order 2024
• MAS News - QCP Capital Settlement
• IRAS Digital Tokens Guidance
• IRAS Digital Tokens PDF
• IRAS GST Digital Tokens
• MAS PA Notice on Digital Tokens
• MAS Consultation on Stablecoins
• MAS Speech on Tokenised Instruments
• MAS About Us