The Monetary Authority of Singapore (MAS) has mandated that all Singapore-based entities providing digital token services to foreign clients must obtain a Digital Token Service Provider (DTSP) license or cease operations by June 30, 2025. This regulation aims to close loopholes allowing firms to operate under less stringent rules overseas. The definition of DTSPs is broad, covering any entity providing token-related services, thus including startups engaged in foreign promotions. The MAS has explicitly warned that businesses failing to comply by the deadline face fines up to SGD 250,000 (approximately USD 200,000) and potential imprisonment for up to three years. Despite industry requests for a phased implementation, the MAS has rejected these appeals, emphasizing a strict enforcement stance to mitigate risks associated with financial crime. Moreover, the MAS is unlikely to issue new DTSP licenses in light of ongoing anti-money laundering and counter-terrorism financing concerns, effectively creating a compliance cliff that may drive firms to relocate operations to more permissive regions. This regulatory shift highlights Singapore's commitment to maintaining its reputation as a trusted financial hub while ensuring strict compliance for digital asset operations.

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