Perpetual Futures Trading in Singapore

Regulatory Framework for Crypto Derivatives

Singapore's regulatory approach to crypto derivatives is governed by two primary pieces of legislation:

• Payment Services Act (PSA) 2019, amended 2024 – The PSA requires licensing for digital payment token (DPT) service providers. This covers exchanges, wallets, and transfer services. MAS classifies crypto tokens as DPTs and requires any entity facilitating trading to hold a Major Payment Institution (MPI) license.
• Securities and Futures Act (SFA) – If a crypto derivative is classified as a capital markets product (which many structured derivatives are), the SFA applies, requiring a Capital Markets Services (CMS) license. Perpetual futures, depending on their structure, may fall under this regime.

MAS has taken an increasingly cautious stance on retail crypto derivatives. Since January 2024, DPT service providers are prohibited from offering any form of lending or staking to retail customers, and marketing of crypto services to the public in Singapore is heavily restricted. Leveraged crypto trading for retail customers faces significant regulatory friction.

However, for institutional and accredited investor-focused platforms, Singapore remains highly attractive. MAS has granted licenses to several major crypto firms and continues to support innovation through regulatory sandboxes and the broader FinTech Regulatory Sandbox framework.

Licensing Requirements and Process

Teams seeking to operate a perpetual futures platform in Singapore typically need one or both of the following licenses:

• Major Payment Institution (MPI) license – Required for DPT service providers. The minimum base capital requirement is SGD 250,000. Applicants must demonstrate robust AML/CFT frameworks, technology risk management, and ongoing compliance capabilities.
• Capital Markets Services (CMS) license – Required if perpetual futures are classified as regulated derivatives under the SFA. This carries higher capital requirements and more extensive compliance obligations, including risk-based capital adequacy requirements.

The licensing process involves:

1. Pre-application engagement – MAS encourages preliminary discussions before formal submission. This stage helps clarify which license(s) apply and identify potential issues early.
2. Formal application – Submission of comprehensive documentation including business plans, compliance manuals, technology architecture, outsourcing arrangements, and fit-and-proper assessments for key personnel.
3. Assessment period – MAS typically takes 6-12 months to process applications, during which multiple rounds of queries and supplementary submissions are common.
4. Approval and conditions – Licenses may be granted with specific conditions, such as transaction volume limits, product restrictions, or enhanced reporting requirements.

All licensed entities must maintain a permanent establishment in Singapore with locally resident directors and compliance officers. Ongoing obligations include regular reporting to MAS, annual audits, and participation in MAS inspections.

Market Opportunity in Singapore

Despite its restrictive stance on retail crypto marketing, Singapore offers substantial market opportunity for perpetual futures platforms:

• Institutional capital – Singapore manages over USD 4 trillion in assets under management, with a growing allocation to digital assets. Family offices, hedge funds, and venture capital firms based in Singapore represent a significant addressable market for institutional-grade derivatives platforms.
• Regional gateway – Singapore serves as the primary gateway to Southeast Asia's 700 million population, a region with rapidly growing crypto adoption. A Singapore-licensed platform carries credibility across the region.
• Talent pool – The city-state has one of the deepest pools of financial technology talent in Asia, with professionals experienced in both traditional derivatives and crypto markets.
• Trading volume – Singapore-based traders and firms are active participants in global crypto derivatives markets. Despite domestic marketing restrictions, the professional and institutional segment remains robust.

The key is targeting the right customer segment. Platforms focused on institutional clients, accredited investors, and professional traders can operate effectively within MAS's framework while building substantial businesses.

How to Launch a Perpetual Futures Exchange in Singapore

Launching a perpetual futures platform in Singapore requires careful navigation of the regulatory environment combined with strong technical infrastructure:

1. Regulatory structuring. Engage Singaporean legal counsel to determine the appropriate license type(s) based on your target market (institutional vs. accredited investors) and product scope. Begin the pre-application process with MAS to confirm your regulatory pathway.

2. Entity and substance. Incorporate a Singapore private limited company (Pte Ltd), appoint locally resident directors, and establish genuine operational presence. MAS scrutinizes substance requirements closely.

3. Technology deployment. Using whitelabel infrastructure like perps.studio enables rapid deployment of a branded perpetual futures exchange without building matching engine infrastructure. perps.studio provides the trading terminal, order routing through Hyperliquid (HIP-3) and Aster DEX, and customizable branding. This approach significantly reduces time-to-market and development costs while meeting MAS technology risk management expectations.

4. Compliance stack. Implement MAS-compliant KYC/AML systems including CDD (Customer Due Diligence), enhanced due diligence for higher-risk customers, ongoing transaction monitoring, and suspicious transaction reporting (STR) to the Suspicious Transaction Reporting Office (STRO).

5. Launch approach. Consider launching with an institutional/accredited investor focus to align with MAS's current regulatory posture. Marketing must comply with strict restrictions—no public promotion of DPT services to retail consumers in Singapore.

Tax Implications for Crypto Derivatives

Singapore's tax regime is generally favorable, though crypto-specific treatment requires careful consideration:

• Corporate tax – Singapore's headline corporate tax rate is 17%, with effective rates often lower due to partial exemptions for the first SGD 200,000 of chargeable income. New startups may qualify for the Start-Up Tax Exemption scheme.
• Capital gains tax – Singapore does not levy capital gains tax. Gains from crypto trading by individuals may be treated as non-taxable capital gains if they are not part of a trade or business. However, if IRAS (Inland Revenue Authority of Singapore) considers the trading activity to be business income, it becomes taxable.
• GST – Since January 2020, the supply of DPTs (including crypto) is treated as an exempt supply for GST purposes, meaning no GST is charged on DPT transactions. This simplifies the tax position for exchange operators.
• Withholding tax – Payments to non-resident service providers may be subject to withholding tax, which is relevant for platforms using offshore technology infrastructure or liquidity providers.

Exchange operators should also consider the tax treatment of fee revenue, which is generally taxable business income, and the GST treatment of services provided to overseas customers versus domestic clients.

Key Considerations for Singapore-Based Platforms

Teams evaluating Singapore as a base for their perpetual futures platform should weigh the following factors:

• Retail marketing restrictions – MAS's prohibition on marketing DPT services to the Singapore public is a significant constraint. Platforms cannot advertise through public media, social media targeting Singapore audiences, or in public places. This effectively limits the domestic retail market, though platforms can still serve self-directed retail customers who seek them out.
• Travel Rule compliance – Singapore has implemented FATF Travel Rule requirements for DPT transfers. Platforms must be able to transmit and receive originator and beneficiary information for transactions above defined thresholds.
• Outsourcing arrangements – MAS has specific guidelines on outsourcing by licensed entities. If using whitelabel infrastructure, the arrangement must be structured and documented in accordance with MAS Technology Risk Management (TRM) Guidelines and outsourcing rules.
• Cross-border considerations – Operating across ASEAN markets from Singapore requires understanding the regulatory requirements of each target jurisdiction. MAS's license does not automatically grant passporting rights to other countries.
• Regulatory trajectory – MAS continues to tighten crypto regulations. The trend is toward greater scrutiny, not less. Operators should build compliance infrastructure that can adapt to evolving requirements.

Singapore rewards operators who embrace compliance and focus on quality over aggressive growth. For teams building institutional-grade perpetual futures platforms with a long-term perspective, it remains one of the strongest jurisdictions in Asia.