Singapore has long been regarded as a forward-thinking hub for fintech and digital innovation. However, when it comes to cryptocurrency regulation, the city-state is far from a "wild west" playground — instead, it enforces one of the most rigorous and transparent regulatory frameworks in the world. For users and investors, understanding Singapore’s licensing system is crucial for ensuring security and compliance.
This guide breaks down the core regulatory requirements for crypto exchanges in Singapore, identifies the officially licensed platforms, and provides actionable insights into evaluating exchange safety beyond just holding a license.
The Foundation: Singapore’s Payment Services Act and DPT Licensing
At the heart of Singapore’s crypto regulation lies the Payment Services Act (PSA), which came into full effect in January 2020. Under this law, all entities offering digital payment token (DPT) services — including cryptocurrency trading, fiat-to-crypto exchanges, wallet management, and transaction settlement — must obtain approval from the Monetary Authority of Singapore (MAS).
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Cryptocurrencies such as Bitcoin and Ethereum are explicitly classified as DPTs under the PSA. Therefore, any exchange facilitating these services must hold a Digital Payment Token (DPT) license. This requirement applies regardless of whether the platform operates physically in Singapore or targets Singaporean users remotely.
There are two primary types of licenses under the PSA:
- Standard Payment Institution (SPI) License: For companies with average monthly transaction volumes below SGD 3 million.
- Major Payment Institution (MPI) License: For firms exceeding SGD 3 million in monthly transactions.
Both SPI and MPI licenses require adherence to strict anti-money laundering (AML), counter-terrorism financing (CTF), and consumer protection standards. However, MPI licensees face more rigorous capital requirements and ongoing compliance obligations.
In short, any exchange claiming to operate legally in Singapore must hold either an SPI or MPI license covering DPT services. Operating without one constitutes illegal activity.
Licensed Crypto Exchanges in Singapore: Only Six Approved
As of now, only six cryptocurrency exchanges have successfully obtained DPT licenses from MAS:
- Coinbase
- Crypto.com
- Independent Reserve
- Blockchain.com
- Sparrow
- Coinhako
These platforms have passed comprehensive scrutiny, including financial audits, governance reviews, and AML/KYC protocol assessments. While over 600 applications have been submitted since 2020, only 14 entities in total have received full licensing — highlighting the exclusivity and difficulty of gaining approval.
Notably, major players like Binance previously scaled back operations in Singapore due to regulatory pressure, underscoring MAS's firm stance on compliance.
Why So Few Licensed Exchanges?
The low approval rate reflects the high barriers to entry:
- Minimum paid-up capital of SGD 100,000
- Robust cybersecurity infrastructure
- Clear ownership structure and fit-and-proper checks for directors
- Ongoing annual audits and reporting obligations
- Requirement to maintain a physical presence in Singapore
These measures ensure that only financially sound and operationally secure platforms serve local users.
Are Unlicensed Exchanges Illegal in Singapore?
Exchanges not holding a DPT license are not automatically illegal — but their ability to operate is severely restricted.
When the PSA was introduced, existing service providers were granted a six-month exemption period, ending on July 28, 2020. After that date, all unlicensed operators were required to cease providing DPT services unless they had a pending application under active review.
Today, there is no public list of exchanges currently applying for a license. MAS only discloses approved entities after final approval. This lack of transparency means users cannot verify whether an unlicensed platform is actively seeking compliance.
Using unlicensed exchanges carries significant risks:
- No regulatory oversight of fund handling
- Higher risk of fraud or insolvency
- No requirement for asset segregation
- Limited recourse in case of disputes
While individual users won’t face criminal penalties for using unlicensed platforms, they assume full responsibility for their funds’ safety.
Enhanced Security Requirements for Licensed Exchanges
Holding a DPT license isn’t a one-time achievement — it comes with ongoing obligations designed to protect user assets:
- Asset Segregation: Customer funds must be held separately from company assets, ideally in trust accounts.
- Operational Independence: Custody functions must be isolated from other business units.
- Daily Reconciliation: Regular verification of user balances against on-chain data.
- Clear Risk Disclosure: Users must be informed about how their assets are held and associated risks.
- Local Presence: A registered office and designated personnel must handle customer complaints.
These rules align with global best practices and aim to prevent scenarios like exchange collapses due to mismanagement or misuse of client funds.
Fighting Financial Crime: KYC and KYT Compliance
Singapore enforces strict anti-money laundering (AML) protocols that go beyond standard Know Your Customer (KYC) checks. Licensed exchanges must also implement Know Your Transaction (KYT) systems.
KYT enables real-time monitoring of incoming crypto transfers to detect:
- Stolen or blacklisted funds
- Links to illicit addresses (e.g., darknet markets)
- Suspicious transaction patterns
If risky activity is detected, exchanges can freeze deposits, request additional documentation, or report to authorities. This proactive approach reduces the likelihood of users unknowingly receiving tainted assets.
How to Evaluate Exchange Safety Beyond Licensing
While a DPT license is a strong indicator of legitimacy, it doesn't guarantee operational soundness. Users should conduct additional due diligence using key security metrics:
1. Proof of Reserves (PoR)
A transparent PoR report verifies that an exchange holds sufficient on-chain assets to cover user balances. Among licensed Singaporean exchanges, only Crypto.com currently publishes regular PoR updates.
2. Third-Party Audits
Independent audits add credibility. For example, Independent Reserve undergoes annual audits verifying both crypto and fiat holdings — a rare level of transparency.
3. User Protection Mechanisms
Some platforms maintain insurance funds or emergency liquidity pools to cover losses in case of hacks.
4. Platform Reputation and History
Longer-established platforms with clean track records generally pose lower risks.
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Frequently Asked Questions (FAQ)
Q: Can I use foreign exchanges in Singapore?
A: Yes, but only if they comply with MAS regulations or don’t target Singaporean users. Using unregulated foreign platforms carries higher risk.
Q: Does having a DPT license mean my funds are 100% safe?
A: No. The license confirms regulatory compliance, not financial stability or immunity from hacking.
Q: How often are licensed exchanges audited?
A: At minimum, once per year — though some conduct more frequent internal or third-party reviews.
Q: Is staking allowed on licensed Singapore exchanges?
A: Yes, but only under specific conditions that comply with MAS guidelines on interest-bearing products.
Q: Can I deposit SGD into licensed exchanges?
A: Yes. All DPT license holders can legally process SGD deposits via bank transfer or other approved methods.
Q: Where can I check if an exchange is licensed?
A: Visit the official MAS website and search the Financial Institutions Directory for “Major Payment Institutions” or “Standard Payment Institutions” with DPT services.
Final Thoughts: Safety First in Singapore’s Regulated Market
Singapore’s tight regulatory environment sets a gold standard for crypto oversight. With only six fully licensed exchanges serving the market, users benefit from enhanced transparency, asset protection, and accountability.
However, regulatory approval is just the starting point. Savvy investors should combine license verification with deeper analysis — including proof of reserves, audit history, and platform transparency — to make informed decisions.
👉 Stay ahead with platforms that meet Singapore-level compliance and beyond.
By prioritizing security over convenience, users can confidently navigate the evolving landscape of digital assets — even in one of the world’s most regulated markets.