MAS Crypto Regulations: 5 Overlooked Issues Crypto Founders Must Understand

Even though MAS crypto regulations have been around for years, many crypto founders—especially early-stage teams—still misunderstand where the rules actually apply. That’s because the framework isn’t just about who’s running a full exchange or issuing a token. It’s about who benefits, what risks exist, and how your system behaves in practice.

If you’re a developer, designer, or compliance lead working on a crypto project in Singapore, you’ll want to look beyond just the application form or the Payment Services Act summary. Here are five under-discussed realities that could impact how you design, promote, and structure your product.

1. How can early teams prepare for MAS audits and reporting?

Credit From: woodruffsawyer

Let’s start with something that’s rarely discussed in launch decks—audit readiness. If you’re applying for a license or even running a sandbox pilot, MAS will expect access to operational records, internal security protocols, and transaction logs.

Too many teams treat documentation like a post-launch task. In reality, it should be built into your architecture from the start. Your wallet infra, smart contract events, and user onboarding flow should all produce verifiable, exportable data. MAS doesn’t just want dashboards—they want logs that stand up in court.

This matters especially if you’re offering digital payment token service features like custody or fiat ramps. Think of it this way: if your logs disappeared tomorrow, could you still prove you weren’t co-mingling funds?

2. Can DAOs or overseas entities bypass MAS crypto regulations?

No—and many learn this too late. MAS doesn’t only regulate incorporated companies. It evaluates activity and impact, not just legal structure.

If you’re a DAO with a Singapore-based core team, treasury wallets controlled by locals, or if your user base is mostly Singaporean—you’re on the radar. MAS crypto regulations are jurisdictional, not structural.

Here’s what they often consider:

Factor	Likely MAS Interest?
Singapore-registered entity	Yes
Remote entity with SG team + product launch in SG	Yes
DAO with SG-based voting, treasury, or user base	Likely
Global DeFi protocol with no SG team, users, or impact	Unlikely

In short: geography and real-world control matter more than clever legal wrappers.

3. How does MAS view crypto advertising and social media promotion?

MAS doesn’t just review your platform. It reviews your tone, language, and even influencer marketing. Under current MAS crypto regulations, you can’t publish promotional content that implies guaranteed returns, “safe” profits, or retail-friendly ease without full risk disclosures.

Even social posts can trigger a warning if they’re misleading. This applies to everything from TikTok to Telegram.

Here are some things that will raise red flags:

• Implying capital preservation for volatile products
• Calling staking “fixed income” or “risk-free”
• Using “safe”/“secure” without explaining custody structure

Teams should implement approval workflows for public content just like they would for smart contract audits. What you say outside the code matters just as much.

4. Is your wallet design MAS-compliant by default?

Probably not—especially if you’re using pooled hot wallets.

MAS expects platforms that hold user funds to operate with full custodial segregation. This means wallets tied to specific users, with defined ownership mapping, time-stamped flows, and access controls that reflect operational governance.

But even teams who don’t “custody” assets directly can be caught off guard. If your smart contract has an admin key, pause function, or upgradability controlled by your team—you may be viewed as a custodian by function.

Startups often inherit legacy infra (like monolithic multisigs) without considering regulatory optics. If your wallet backend isn’t audit-friendly, that’s a red flag—even if your product works just fine.

5. What does MAS consider ‘regulated activity’ in crypto?

This is where many founders misstep—not because they ignore the rules, but because they think they’re outside them. MAS doesn’t only oversee traditional exchanges or fiat ramps. It’s watching for any digital activity that mirrors financial behavior: storing value, transferring it, promising return, or enabling market speculation.

For example, you might launch a loyalty token that wasn’t meant to be traded. But once users begin swapping it for real value—or if the token gains price volatility and becomes speculative—it could quickly fall into regulatory territory. Similarly, a stablecoin pegged to fiat but issued without sufficient reserves may be viewed as a stored-value facility, which triggers licensing requirements.

Even smart contracts with built-in reinvestment or automated yield functions can cross the line. If your DApp effectively lets users deposit assets, calculate returns, and exit later with more than they started—MAS may treat it like an investment product.

In short, if your platform holds value, transforms it, or returns it based on some mechanism you control or created, you’re probably doing something MAS wants oversight on. Many teams don’t intend to become financial intermediaries—but in function, that’s often exactly what they are.

MAS Regulation Isn’t a Wall—It’s a Lens

Instead of seeing MAS crypto regulations as a wall, think of them as a lens—one that clarifies how you design your crypto product with trust and accountability in mind. Whether you’re running a DAO, shipping a DEX, or preparing your first audit, the questions above should guide—not frustrate—your progress.

And remember, the strongest crypto builders in Singapore aren’t the ones who avoid MAS scrutiny. They’re the ones who prepare for it early—and use it as proof they’re building something real.