Jail, $200,000 fine: Will Singapore’s new crypto rules force start-ups to relocate to Dubai?

Dubai: Singapore gives crypto start-ups a hard deadline: get licensed by June 30, or shut down overseas operations — or face jail time and steep fines.

In a sweeping crackdown, the Monetary Authority of Singapore (MAS) issued a strict ultimatum to digital token companies: comply or leave.

Under new rules announced over the past weeks, all Singapore-based digital token service providers (DTSPs) must either secure a licence to operate internationally or halt all overseas services by June 30, 2025.

Violators face criminal charges, including fines of up to SGD250,000 (USD 200,000) and up to three years in prison.

The new regulation falls under Singapore’s Financial Services and Markets Act (FSM Act 2022), which enforces full compliance for any company, partnership, or sole proprietor incorporated in Singapore offering digital token services to foreign customers.

MAS has made clear:

Even companies with a small percentage of overseas operations must comply. The rule is based strictly on where the company is registered, not where its customers or systems are located.

MAS says it wants to close regulatory loopholes that previously allowed crypto firms to use Singapore as a base while sidestepping oversight in the markets they served.

Under Section 137 of the FSM Act, businesses based in Singapore are considered to be operating from Singapore — regardless of where their clients are. That closes a long-standing backdoor that many crypto players exploited.

Although MAS hasn't officially paused licensing, it has clarified that new DTSP licences will be granted only under "extremely limited circumstances." This makes approval exceptionally rare — especially for firms with global ambitions.

The only exemptions are for companies already licensed under Singapore’s:

Also excluded are services related to utility or governance tokens.

With the June deadline looming, many firms are actively relocating. According to reports by The Financial Times and Bloomberg, Bitget and Bybit — two major crypto exchanges with a presence in Singapore — are preparing to shift staff and operations to Hong Kong and Dubai.

Industry experts have been widely viewing Dubai, in particular, emerging as a top alternative, citing how its pro-business environment and clear crypto framework makes it an investment-friendly magnet.

Singapore’s once-lauded crypto hub status took a hit after multiple high-profile collapses, including Terraform Labs, whose founder was linked to Singapore during an international manhunt in 2022.

MAS has now taken a decisive stance: Only serious players with full regulatory compliance will be allowed to stay.

With little time left, the race is on for crypto start-ups to choose: Get licensed, get out, or face the consequences.