Trying to launch a crypto exchange in Singapore? You’ll need to navigate a tight‑but‑clear licensing maze drawn by the Monetary Authority of Singapore (MAS). Since June302025 the Singapore crypto exchange license regime forces every Digital Token Service Provider (DTSP) to pick a proper payment‑service licence, prove solid AML controls and keep a bucket of capital ready. Below you’ll find everything a founder, compliance chief or legal adviser needs to get the green light - from the big‑picture framework down to the exact paperwork you’ll hand over.

Why Singapore’s Framework Matters

Singapore sits at the crossroads of Asia’s fintech boom and strict regulatory oversight. The city‑state’s approach blends the flexibility of an offshore hub with the rigor of a major financial centre. Two statutes drive the regime:

• Payment Services Act (PSA, 2019) - the original base for payment‑service licences.
• Financial Services and Markets Act (FSMA, 2022) - introduced the DTSP overlay in 2025.

Both laws are enforced by MAS, which issued its final DTSP response on 30May2025 and gave firms just four weeks to comply. No grace period, no “watch‑list” - you either meet the standards or you stop operating.

Who Needs a License?

If your platform lets users buy, sell, swap or store crypto tokens for any client - Singapore‑based or overseas - you fall under the DTSP definition. The key trigger is “substantive regulated activity” involving digital tokens, regardless of where your customers live. Even custodial wallets or token‑swap services count.

Exceptions are narrow: pure‑instrument‑listing sites that never handle funds, or services limited to a handful of low‑risk activities that qualify for the Exempt Payment Service Provider category.

License Categories at a Glance

The choice hinges on projected turnover, the breadth of services and how much you’re willing to invest in compliance infrastructure.

Core Compliance Pillars

All licence holders must obey MAS Notice PSN02, the AML backbone that mirrors the standards imposed on banks. Here’s what the notice demands:

1. Robust Customer Identification (KYC) - collect full name, residential address, government ID, and source‑of‑funds evidence for every user.
2. Ongoing Transaction Monitoring - real‑time screening for suspicious patterns, automated triggers for large or rapid trades.
3. Suspicious Activity Reporting - file SARs with MAS within 24hours of detection.
4. Record‑keeping - retain all client and transaction data for at least five years.

Beyond PSN02, you’ll need:

• Capital adequacy (SGD100k or SGD250k depending on licence).
• Risk‑management policy covering market, liquidity, operational and cyber risks.
• Segregated client‑fund accounts or escrow mechanisms.
• Independent internal audit and an external audit firm approved by MAS.
• Regular regulatory reporting - monthly transaction summaries, annual compliance statements.

Step‑by‑Step Application Checklist

1. Define your business model. Draft a detailed plan covering token pairs, fee structure, target markets and projected volumes.
2. Choose the licence tier. Use the table above to match your expected monthly turnover.
3. Prepare capital proof. Bank statements or a letter of credit showing the required SGD100k/250k.
4. Write AML/KYC policies. Align every procedure with MAS Notice PSN02 - include onboarding flow charts and escalation matrices.
5. Build internal controls. Document risk‑assessment methodology, incident‑response plan, and IT security standards (ISO27001 is a good reference).
6. Engage a compliance consultant or law firm. Most applicants hire a specialist to pre‑screen the dossier - it cuts the back‑and‑forth with MAS.
7. Submit the application. The portal on MAS’s website accepts a single PDF bundle - business plan, capital proof, AML/KYC policies, risk‑management framework, and audit‑firm appointment letter.
8. Undergo MAS review. Expect an on‑site inspection or a request for supplementary documents. Respond within the stipulated timeframe (usually 30days).
9. Receive the licence. After approval, you’ll be issued a licence certificate and a unique licence number for all future filings.
10. Maintain ongoing compliance. Schedule quarterly internal audits, file monthly transaction reports, and keep capital deposits untouched.

Tick each box and you’ll be ready to submit a complete, MAS‑acceptable package.

Timeline, Costs & Practical Tips

From start to finish, most firms budget 6‑12months. The biggest cost drivers are legal counsel (SGD30‑50k), external audit fees (SGD10‑20k per year) and technology upgrades for AML monitoring (SGD15‑30k). Here are a few shortcuts:

• Leverage existing AML SaaS. Platforms that already integrate with MAS’s API cut development time.
• Start with a Standard licence. If you can keep monthly volume under SGD3million, the lower capital and reporting burden makes the first year smoother.
• Document early. MAS often rejects applications for missing risk‑assessment details - having a polished risk matrix before you submit saves weeks.
• Keep a compliance officer on‑board. A full‑time, MAS‑certified officer demonstrates seriousness and speeds up the review.

Common Pitfalls & How to Avoid Them

Even seasoned fintechs stumble. The most frequent mistakes are:

• Under‑estimating AML scope. Treating KYC as a one‑time form leads to SAR rejections. Build a dynamic monitoring system that flags velocity, geolocation anomalies and sudden value jumps.
• Mixing offshore and Singapore entities. MAS expects the licence holder to be a Singapore‑incorporated entity with clear ownership. Using a foreign holding company without proper disclosure can trigger a refusal.
• Neglecting capital availability. Locked‑up capital in crypto assets doesn’t count - it must sit in a liquid SGD‑denominated bank account.
• Delaying audit appointments. The first external audit must be completed within six months of licence issuance; missing that deadline forces a temporary suspension.

Address each of these ahead of time and you’ll sidestep the most painful delays.

Frequently Asked Questions

Getting a crypto exchange licence in Singapore isn’t a walk in the park, but the payoff is a trusted brand operating under a globally respected regulatory shield. Follow the checklist, invest in solid AML tech, and keep your capital liquid - and you’ll be ready to tap into Southeast Asia’s fastest‑growing crypto market.