You will check one exchange's licence, legal entity and customer asset terms before deciding whether to use it.
Darren is ready to move his S$2,000 from a friend's recommendation to a decision of his own. He has read about the Payment Services Act, the retail protections and what a licence cannot do. What he has not done is check one specific exchange from end to end. Reading about checks is easy. Running one takes about 25 minutes, and you will do it here for one exchange you use or are thinking about using.
You will need the exchange's website or app, the MAS Financial Institutions Directory, and the MAS Investor Alert List, both on the MAS website. Keep notes as you go, with the date, because licence status can change.
Brands and companies are different things. The name on the app is a brand. The company you actually sign an agreement with is the legal entity, and that is what MAS licenses.
Open the exchange's terms of service, sometimes called terms of use or the user agreement. Near the start, usually in the first few paragraphs or in a definitions section, it will say who "we" or "the company" is. Copy that name exactly, including "Pte. Ltd." or any other suffix, and note the country it is registered in. Also note which country's law governs the agreement, which is usually in a section near the end.
Watch for terms that name more than one entity, for example one company for Singapore customers and another for everyone else. Make sure you find the one that applies to a customer in Singapore. If you cannot find any legal entity named at all, write that down. It is already a reason for concern.
Search the MAS Financial Institutions Directory using the legal entity's name rather than the brand. When you find it, record three things: the exact name as listed, the type of licence, and the activities it is licensed for. You are looking for a licence that covers digital payment token services, which for the larger exchanges is a Major Payment Institution licence, as covered in lesson 3.1, How MAS licenses crypto exchanges.
If the brand appears in the directory but under a different entity from the one in the terms, stop and work out why. It might be an innocent difference in how a name is written. It might also mean the company you would contract with is not the one MAS licensed.
Go back to the terms, or the exchange's help pages, and find the sections on custody of customer assets. You are looking for answers to four questions.
Are retail customers' tokens held on trust and kept separate from the firm's own assets, as lesson 3.2, The protections MAS requires for retail customers, says licensed firms must do? Does the exchange lend out or stake customers' tokens, and if it offers either, to whom and on what terms? How are Singapore dollar balances held? And what happens to customers' assets if the firm becomes insolvent?
Quote the relevant sentence for each answer in your notes, so that you can show someone else what the terms actually say rather than your impression of it.
Search the MAS Investor Alert List for the brand, the website address and any names that look similar. Lookalike names are common, and firms on the list sometimes rebrand. A match does not settle everything on its own, but it is a strong signal to stop and look harder, as lesson 3.3, What a licence does not protect you from, explained.
Here is how Darren's notes looked for the licensed app he was considering, with the details kept general because this course does not name or recommend any exchange.
Legal entity: a Singapore private limited company, named in the first section of the terms of service, with Singapore law governing the agreement. Directory: the same entity listed as a Major Payment Institution, licensed for digital payment token services, checked on the day he wrote his notes. Customer assets: the terms say retail customers' tokens are held on trust and segregated; no lending or staking is offered to retail customers. Cash balances: held in accounts the terms describe as safeguarded customer money, which he noted is not the same as an SDIC-insured deposit. Investor Alert List: no match for the brand or website; one lookalike website name found, and that site's owner was on the list. Verdict: passes the check, with a reminder to repeat it in a year.
Look at the second last line. The lookalike he found was not the exchange he was checking, but it is exactly the kind of site someone could land on by mistyping an address. Darren bookmarked the real site so that he would always reach it directly.
He also ran the check on his friend's overseas app. The terms named a company registered outside Singapore, and the directory had no listing for it. That is not proof of wrongdoing, but every protection from lesson 3.2 was missing, and his verdict was a fail.
Your verdict should be one line, and it should follow from the evidence above it. "Passes" or "fails" is not enough on its own. Say why, in a few words: "Fails: entity in terms is not in the directory", or "Passes: licensed MPI, tokens held on trust, no alert list match". If you could not answer a step, the honest verdict is that the exchange has not passed yet. Now take the exchange you chose and work through each step in order.
Complete the exchange check template for one exchange and write a one-line verdict on whether it passes your check.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).