Crowds gather at Singapore's iconic Merlion Park, a popular spot for both locals and tourists. Photo by Unsplash

The Monetary Authority of Singapore (MAS), the city-state's central bank, last month said digital token service providers (DTSPs) that served only overseas clients must have a licence to continue operations past June 30 – or close up shop.

The MAS in a subsequent statement added that it has "set the bar high for licensing and will generally not issue a licence" for such operations.

The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, the MAS is unable to effectively supervise such persons, the central bank said, referring to firms serving solely foreign clients.

Analysts welcomed the move to tighten controls on crypto exchanges, noting that, Singapore – a major Asian financial hub – has seen its reputation affected by several recent high-profile cases that have undermined trust in the emerging crypto sector. These included the collapse of cryptocurrency hedge fund Three Arrows Capital and Terraform Labs, which both filed for bankruptcy in 2022.