SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
Utility Tokens Utility tokens providing access to products or servic - es are generally not regulated unless they resemble financial instruments. However, issuers must comply with consumer protection laws. 10.4 Regulation of “Issuers” of Blockchain Assets In Singapore, the regulation of issuers of blockchain assets, including cryptocurrencies, is primarily gov - erned by the PSA and SFA, and depends on the legal characterisation of the token. Where a blockchain asset constitutes a capital markets product, such as shares, debentures or units in a collective investment scheme, its issuance is regulated under the Securities and Futures Act. Issuers remain subject to applicable AML/CFT obligations. Issuers must prepare and lodge a prospectus with MAS before offering securities tokens to the public, disclosing comprehensive information about the issu - er, the tokens and associated risks. However, certain exemptions from prospectus requirements may apply, subject to specific conditions. The digital token service provider regime under the FSMA 2022 extends to Singapore-incorporated enti - ties that provide digital token services to customers outside Singapore. Where such entities are involved in issuance-related activities or other digital token ser - vices, they are required to be licensed by the MAS and to comply with AML/CFT standards that are compara - ble to those applicable to domestic-facing operations. The tokenisation of real-world assets presents a number of legal and regulatory challenges in Singa - pore. Key issues include the enforceability of token- holder rights against the underlying asset, the legal recognition of fractionalised interests recorded on a distributed ledger, and the robustness of custody and settlement arrangements. In addition, tokenised assets often fall within existing securities or collective investment frameworks, which may limit flexibility in structuring offerings and impose prospectus, disclo - sure and licensing requirements. MAS has indicated support for asset tokenisation initiatives, but has emphasised the need for strong legal foundations,
clear investor disclosures and operational resilience before such structures can be deployed at scale. 10.5 Regulation of Blockchain Asset Trading Platforms In Singapore, blockchain asset trading platforms and secondary market trading are regulated by the MAS under the SFA, PSA and the new DTSP framework under FSMA 2022. Digital asset exchanges must comply with AML/CTF regulations, CDD procedures and cybersecurity standards. Intermediaries in sec - ondary market trading, such as brokers and advisers, must hold MAS licences and meet disclosure, market conduct and investor protection requirements. P2P trading platforms also need to adhere to AML/CFT regulations and MAS guidelines to prevent financial crime and fraud. From 30 June 2025, Singapore- incorporated persons providing specified digital token services to customers outside Singapore come within the digital token service provider regime under the FSMA and must be licensed by MAS, signalling a high bar for licensing and no transitional arrangements. The regime addresses the regulatory arbitrage that previously allowed Singapore entities to operate off - shore-only trading platforms without MAS oversight. 10.6 Staking Staking services for cryptocurrencies are regulated under the PSA and, in some cases, the SFA. Provid - ers offering DPT services must be licensed under the PSA and comply with AML/CFT rules. Recent PSA amendments require customer funds to be held in statutory trusts and limit staking services for retail customers. If staking arrangements resemble investment contracts, they may fall under the SFA, requiring a Capital Markets Services Licence. These regulations aim to protect investors and ensure transparency while supporting innovation. 10.7 Crypto-Related Lending Cryptocurrency lending services in Singapore are regulated under the PSA and potentially the SFA. Under the PSA, entities must obtain a licence and comply with AML/CFT regulations. Recent amend - ments also require safeguarding customer assets
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