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Singapore

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#479
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Created
2025-06-26 13:13
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Executive Summary

In Singapore, individual citizens and residents are legally permitted to engage in cryptocurrency trading, subject to regulatory oversight. The Monetary Authority of Singapore (MAS) oversees this activity, with the Payment Services Act 2019 (PS Act) establishing a licensing framework for Digital Payment Token (DPT) service providers and mandating AML/CFT compliance. Amendments to the PS Act and the introduction of the Financial Services and Markets Act (FSMA) 2022 have expanded MAS's oversight, particularly for Singapore-based crypto firms offering services overseas. While fostering digital asset innovation, MAS actively cautions the public about the high risks associated with cryptocurrency trading and has implemented consumer protection measures.

Key Pillars

The primary regulator is the Monetary Authority of Singapore (MAS), which oversees cryptocurrency activities. Core compliance requirements include robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures for DPT service providers. Licensing is required for DPT service providers under the Payment Services Act 2019 (PS Act), and Singapore-based crypto firms offering services overseas must be licensed under the Financial Services and Markets Act (FSMA) 2022.

Landmark Laws

Payment Services Act 2019 (PS Act):
* Date of Issue: January 2020 (effective date)
* Summary: Establishes a licensing framework for DPT service providers and imposes obligations focused on AML/CFT risks.
Financial Services and Markets Act (FSMA) 2022:
* Date of Issue: N/A (mentioned in the context of amendments)
* Summary: Expands MAS's oversight, requiring Singapore-based crypto firms offering services overseas to be licensed from June 30, 2025.

Considerations

Legal Classification: Cryptocurrencies are referred to as Digital Payment Tokens (DPTs) under the legal framework.
Tax Treatment: There is generally no capital gains tax on cryptocurrency transactions for individual investors. However, individuals or businesses that trade cryptocurrencies as a primary business activity may be subject to income tax on their profits.
Risks and Concerns: The MAS has consistently warned the general public about the high risks associated with cryptocurrency trading, citing the potential for significant losses due to speculative swings.
Operational Challenges: New rules include banning the use of locally issued credit cards for cryptocurrency purchases by retail investors and restricting promotional incentives.

Notes

Future Plans: MAS continues to refine its regulatory approach to mitigate risks, protect consumers, and maintain financial stability, while still allowing for innovation in the digital asset sector.
Consumer Protection: Recent regulatory enhancements focus on consumer protection. For instance, DPT service providers are required to conduct risk assessments on their customers. Furthermore, MAS has introduced stricter rules for the custody of digital assets, requiring segregation of customer assets and a significant portion to be held in cold wallets. Retail customers are also prevented from engaging in activities like pledging, lending, or staking their DPTs held with licensed providers.

Detailed Explanation

In Singapore, individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies. The Monetary Authority of Singapore (MAS), the nation's central bank and financial regulator, proactively and dynamically regulates the environment. Cryptocurrencies, referred to as Digital Payment Tokens (DPTs) under the legal framework, can be used as a medium of exchange, although they are not considered legal tender. The primary legislation is the Payment Services Act 2019 (PS Act), which took effect in January 2020. This act establishes a licensing framework for DPT service providers, including exchanges, and mandates AML/CFT compliance. DPT service providers must implement robust KYC procedures, conduct customer due diligence (CDD), monitor transactions, and report suspicious activities. The MAS has been actively refining its regulatory approach with amendments to the PS Act and the introduction of the Financial Services and Markets Act (FSMA) 2022. From June 30, 2025, Singapore-based crypto firms offering services overseas must also be licensed under the FSMA to close regulatory loopholes and maintain high standards, regardless of customer location. The MAS has consistently warned the public about the high risks of cryptocurrency trading and discourages DPT service providers from aggressive marketing to the general public to prevent impulsive trading. Recent regulatory enhancements focus on consumer protection, including banning the use of locally issued credit cards for cryptocurrency purchases by retail investors and restricting promotional incentives. DPT service providers are also required to conduct risk assessments on their customers. Furthermore, MAS has introduced stricter rules for the custody of digital assets, requiring segregation of customer assets and a significant portion to be held in cold wallets. Retail customers are also prevented from engaging in activities like pledging, lending, or staking their DPTs held with licensed providers. Taxation of cryptocurrencies in Singapore depends on the nature of the activity; individual investors generally do not face capital gains tax, while businesses trading cryptocurrencies as a primary activity may be subject to income tax. In summary, retail cryptocurrency trading in Singapore is allowed but operates within a comprehensive and increasingly stringent regulatory framework designed to mitigate risks, protect consumers, and maintain financial stability, while still allowing for innovation in the digital asset sector.

Summary Points

Retail Trading of Cryptocurrencies in Singapore: Regulatory Overview (Report Date: 2025-06-26)

1. Regulatory Status:

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies (referred to as Digital Payment Tokens - DPTs).
  • Not Legal Tender: Cryptocurrencies are not considered legal tender but can be used as a medium of exchange.

2. Key Regulatory Bodies:

  • Monetary Authority of Singapore (MAS):
    • Central bank and primary financial regulator.
    • Proactive and evolving regulatory approach.
    • Issues guidelines and warnings regarding cryptocurrency trading risks.
    • Oversees licensing and compliance of DPT service providers.

3. Important Legislation and Regulations:

  • Payment Services Act 2019 (PS Act):
    • Effective January 2020.
    • Establishes a licensing framework for DPT service providers (exchanges, etc.).
    • Imposes obligations focused on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
  • Financial Services and Markets Act (FSMA) 2022:
    • Expands MAS's oversight.
    • Requires Singapore-based crypto firms offering services overseas to be licensed (effective June 30, 2025).

4. Requirements for Compliance (DPT Service Providers):

  • Licensing: Required under the PS Act for providing DPT services.
  • KYC/AML/CFT:
    • Robust Know Your Customer (KYC) procedures.
    • Customer Due Diligence (CDD).
    • Transaction monitoring.
    • Reporting of suspicious activities.
  • Custody of Digital Assets:
    • Segregation of customer assets from the service provider's assets.
    • Significant portion (90%) of customer assets to be held offline in cold wallets.
  • Risk Assessments: DPT service providers are required to conduct risk assessments on their customers.

5. Notable Restrictions and Limitations:

  • Restrictions on Public Promotion:
    • MAS discourages DPT service providers from promoting their services to the general public, especially through aggressive marketing.
  • Consumer Protection Measures:
    • Ban on using locally issued credit cards for cryptocurrency purchases by retail investors.
    • Restrictions on promotional incentives.
    • Retail customers are prevented from engaging in activities like pledging, lending, or staking their DPTs held with licensed providers.

6. Recent Developments and Changes:

  • FSMA Licensing Requirement (June 30, 2025): Singapore-based crypto firms offering services overseas must be licensed.
  • Enhanced Consumer Protection: New rules regarding credit card usage, promotional incentives, and custody requirements.
  • Stricter Custody Rules: Mandating segregation of assets and cold wallet storage.

7. Taxation:

  • Individuals: Generally no capital gains tax on cryptocurrency transactions.
  • Businesses: Individuals or businesses trading cryptocurrencies as a primary business activity may be subject to income tax on profits.

8. MAS Warnings:

  • MAS consistently warns the public about the high risks associated with cryptocurrency trading and its unsuitability for the general public due to price volatility.

Full Analysis Report

Retail_Trading_Status: Singapore

Report Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status

Allowed-Regulated

2. Detailed Narrative Explanation

Individual citizens and residents in Singapore are legally permitted to buy, sell, and hold cryptocurrencies. The regulatory environment is characterized by a proactive and evolving approach from the Monetary Authority of Singapore (MAS), the nation's central bank and financial regulator. While not considered legal tender, cryptocurrencies, referred to as Digital Payment Tokens (DPTs) under the legal framework, can be used as a medium of exchange.

The primary piece of legislation governing cryptocurrency activities is the Payment Services Act 2019 (PS Act), which came into effect in January 2020. This act establishes a licensing framework for DPT service providers, including exchanges, and imposes various obligations on them. These obligations are primarily focused on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) risks. DPT service providers are required to implement robust Know Your Customer (KYC) procedures, conduct customer due diligence (CDD), monitor transactions, and report suspicious activities.

The MAS has been actively refining its regulatory approach. Amendments to the PS Act and the introduction of the Financial Services and Markets Act (FSMA) 2022 have further expanded MAS's oversight. Notably, from June 30, 2025, Singapore-based crypto firms offering services overseas must also be licensed under the FSMA. This aims to close regulatory loopholes and ensure that firms operating from Singapore adhere to high standards, regardless of where their customers are located.

While Singapore fosters innovation in the digital asset space, the MAS has consistently warned the general public about the high risks associated with cryptocurrency trading. The MAS has issued guidelines to discourage DPT service providers from promoting their services to the general public in Singapore, particularly through aggressive marketing tactics or in public areas. These measures aim to prevent impulsive trading and ensure consumers are aware of the potential for significant losses.

Recent regulatory enhancements focus on consumer protection. For instance, new rules include banning the use of locally issued credit cards for cryptocurrency purchases by retail investors and restricting promotional incentives. DPT service providers are also required to conduct risk assessments on their customers. Furthermore, MAS has introduced stricter rules for the custody of digital assets, requiring segregation of customer assets and a significant portion to be held in cold wallets. Retail customers are also prevented from engaging in activities like pledging, lending, or staking their DPTs held with licensed providers.

Taxation of cryptocurrencies in Singapore depends on the nature of the activity. For individual investors, there is generally no capital gains tax on cryptocurrency transactions. However, individuals or businesses that trade cryptocurrencies as a primary business activity may be subject to income tax on their profits.

In summary, retail cryptocurrency trading in Singapore is allowed but operates within a comprehensive and increasingly stringent regulatory framework designed to mitigate risks, protect consumers, and maintain financial stability, while still allowing for innovation in the digital asset sector.

3. Specific, Relevant Text Excerpts

  • Legality and Regulation under PS Act: "Yes, cryptocurrency is legal in Singapore and regulated under the Payment Services Act (PS Act)." (Sumsub, 2025)
  • MAS's Stance on Retail Trading: "MAS has consistently warned that trading DPTs is highly risky and not suitable for the general public, as the prices of DPTs are subject to sharp speculative swings." (Monetary Authority of Singapore, 2022)
  • Licensing for DPT Service Providers: "The PSA requires a person who conducts a business of providing a payment service to obtain a payment licence. There are seven payment services defined in the PSA... DPT service..." (ICLG, 2024)
  • AML/CFT Requirements: "For companies that are directly dealing with cryptocurrencies — whether providing an exchange platform, custody, or other operations — robust Know Your Customer (KYC), Anti-Money Laundering (AML), and Combating the Financing of Terrorism (CFT) procedures have to be put in place to ensure compliance with the PSA." (Merkle Science, 2022)
  • Expansion of Regulatory Scope (FSMA): "All Singapore-based crypto firms offering overseas services must be licensed under FSMA by June 30, 2025." (CCN.com, 2025) "The Monetary Authority of Singapore (MAS) has imposed a 30 June deadline for locally based digital token service providers (DTSPs) to cease offering services to overseas markets unless they are properly licensed, as part of an ongoing regulatory crackdown under the Financial Services and Markets Act 2022 (FSM Act)." (GTR, 2025)
  • Consumer Protection Measures (Credit Card Ban): "No, as of 2025, using locally issued credit cards to buy cryptocurrencies is prohibited in Singapore. This rule is part of the Monetary Authority of Singapore's broader effort to protect retail investors from risky behavior and excessive leverage." (CCN.com, 2025)
  • Custody Requirements: "Under the new guidance, customers' digital assets held in trust must be segregated from the assets of the service provider... A significant portion, ninety percent, of customer assets must be stored offline in cold wallets." (Ledger Insights, 2024) "Accordingly, the guidelines mandate that service providers prevent retail customers from engaging in activities like pledging, lending, or staking their digital assets." (Ledger Insights, 2024)
  • Discouraging Public Promotion: "The Monetary Authority of Singapore (MAS) today issued guidelines giving effect to MAS' expectations that Digital Payment Token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore." (Monetary Authority of Singapore, 2022)
  • Taxation for Individuals: "Singapore is one of the friendliest countries for cryptocurrency in the world with a 0% capital gains tax for individual investors." (CoinLedger, 2025) "Bitcoin is considered an asset in Singapore, so it's important to know that capital gains tax does not apply to your Bitcoin transactions." (Bitcoinist, 2025)

4. Direct, Accessible URL Links

  1. Sumsub (2025-01-21). Singapore Crypto Regulations—All You Need to Know in 2025.
  2. ICLG (2024-10-25). Blockchain & Cryptocurrency Laws and Regulations 2025 – Singapore.
  3. CCN.com (2025-06-06). Singapore's Crypto Clampdown: What New 2025 Rules Mean for Wallets, Exchanges & Traders.
  4. Merkle Science (2022). Overview of Cryptocurrency Regulations in Singapore 2022.
  5. Monetary Authority of Singapore (2022-01-17). MAS Issues Guidelines to Discourage Cryptocurrency Trading by General Public.
  6. Monetary Authority of Singapore. News. (General search for MAS news and statements)
  7. Cointelegraph (2025-06-22). Singapore New Crypto Rules: $200K Fines, Jail Risk.
  8. Monetary Authority of Singapore. Digital Payment Token Services. (Information on regulation)
  9. Advomi. Singapore's regulations on trading of crypto assets.
  10. MoneySENSE. Risks Of Digital Tokens.
  11. Straits Times (2022-01-18). Under new MAS guidelines, crypto trading should not be promoted to the public.
  12. Global Trade Review (2025-06-02). Singapore tells crypto firms to halt overseas operations by 30 June.
  13. Ledger Insights (2024-04-02). MAS introduces new crypto regulations, including digital asset custody.
  14. Bovill Newgate (2022-11-09). MAS calibrates consumer protection measures to curb crypto trading risks.
  15. Compliance Solutions Strategies (CSS) (2025-06-05). Singapore Gets Tough on Offshore Crypto Operators as Time Runs Out.
  16. Tookitaki. Cryptocurrency in Singapore: Key Regulations to Take Note On.
  17. Coinhako. Is Bitcoin legal in Singapore?
  18. KYC Chain (2024-11-05). Maintaining KYC, AML & CTF Compliance across Multiple Jurisdictions for Crypto Firms.
  19. Bitcoinist (2025-04-24). Is Buying Bitcoin in Singapore Legal? Everything You Need to Know.
  20. CoinLedger (2025). Singapore Crypto Tax: A Comprehensive Guide (2025).

Web Sources (21)

Sources discovered via web search grounding

Search queries used (7)
  • retail cryptocurrency trading regulations Singapore MAS
  • Singapore crypto regulation for individuals
  • MAS statements on cryptocurrency trading
  • Payment Services Act Singapore cryptocurrency
  • KYC/AML requirements for crypto exchanges in Singapore
  • Are Singapore citizens allowed to buy and sell cryptocurrency?
  • Recent updates on crypto regulation in Singapore 2024 2025
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