Singapore Begins to Drive Out Crypto Circle Members
Once a Web3 paradise, Singapore is now starting to drive people away.
On May 30, the Monetary Authority of Singapore (MAS) officially released the final policy guidelines for "Digital Token Service Providers (DTSP)," with a very tough stance:
All crypto service providers registered or operating in Singapore must, without a DTSP license, stop providing services to foreign customers by June 30, 2025.
There is no transition period, and violators will be legally punished. Companies found to be in violation of the law may face fines of up to SGD 250,000 (USD 200,000) and imprisonment of up to three years.
This policy came as a bolt from the blue, causing many crypto professionals in Singapore to be shocked.
As the major hub for Web3 in Asia, Singapore has always been the perfect place for "regulatory arbitrage."
Singapore previously adopted a "differentiated regulation" strategy, allowing companies registered in Singapore to freely provide services to overseas customers, while having stricter regulatory requirements for businesses targeting the local market.
Especially when major markets like China implemented a comprehensive ban and the U.S. SEC increased enforcement, Singapore timely played the role of a safe haven, providing a secure landing spot for many crypto exchanges, funds, and projects, leading to wave after wave of crypto business migrations. Even Singapore's national sovereign wealth fund, Temasek, had once invested in crypto enterprises like FTX and Immutable, consolidating Singapore's status as the Asian crypto center.
However, the clarity of this regulatory policy has gradually closed the loophole of "regulatory arbitrage."
According to the final regulatory response document released by Singapore's MAS, the most stringent key points are:
Comprehensive Regulation of Cross-Border Business: Whether the service object is a local or overseas customer, as long as digital token-related business is conducted within Singapore, a DTSP license is required. This directly cuts off the past regulatory arbitrage path of "registered in Singapore but only serving overseas customers."
Extremely Broad Definition of Business Premises: MAS defines "business premises" as "any place in Singapore used by a licensed person to conduct business," even including movable stalls. This definition almost covers all possible business premises, regardless of size.
Dual Coverage of Individuals and Institutions: The regulatory scope includes both individuals or partnerships operating in Singapore and Singapore companies operating digital token services abroad, achieving full coverage of the subject.
In addition, although MAS stated that overseas company employees working from home can be accepted, the definition of "employee" is ambiguous. Whether project founders and shareholders are considered employees is entirely at MAS's discretion.
Why did MAS in Singapore suddenly crack down?
This is not a sudden policy attack by Singapore's financial authorities on crypto companies. As early as 2022, Singapore's MAS issued the "Financial Services and Markets Act," with Part IX dedicated to crypto regulation. It then conducted multiple public consultations and opinion solicitations. The document on May 30 was a response to the consultations, detailing the specific regulatory methods, regulations, notices, and DTSP licensing guidelines.
According to the consultation document, MAS's core consideration is that "some crypto companies may damage Singapore's reputation."
The original text states, "Since digital token services have the characteristics of being based on the Internet and cross-border, digital token service providers (DTSPs) are more likely to face money laundering/terrorist financing (ML/TF) risks... The main risk DTSPs pose to Singapore is reputational risk, i.e., if they are involved in or misused for illegal purposes, it may damage Singapore's reputation."
The origin of this issue may date back to 2022 when Temasek's investment in the crypto exchange FTX and the local crypto fund Three Arrows Capital collapsed, severely damaging Singapore's financial reputation. Then-Singapore Finance Minister (now Prime Minister) Lawrence Wong publicly stated that this investment caused reputational damage, and Temasek subsequently imposed salary cuts on the investment team and senior management.
Under the new regulations, which crypto enterprises will be affected?
According to the consultation document, all entities involved in crypto asset trading need to be licensed, including crypto trading platforms, crypto custody, crypto transfers, crypto issuance, etc.
With the deadline approaching on June 30, 2025, panic from friends on social media platforms like WeChat has enveloped the crypto professionals in Singapore, but more emotions are confusion.
"We were previously unaware of the relevant policies. Now, everyone's opinions differ, so we can only wait and see. Worst case, we leave Singapore and go to neighboring Malaysia," said Adam, a project professional (pseudonym).
Another crypto trader, Kevin, is very distressed. His company has already made plans to move the office to Hong Kong, but he doesn't know the exact timeline. Having lived in Singapore for two years, he is preparing to apply for Singapore permanent residency (PR) and feels regretful and reluctant due to this change.
Previously, Hong Kong Legislative Council member Wu Jiezhuang posted on social media inviting Singapore crypto professionals to relocate to Hong Kong, stating: "Singapore recently released the 'Digital Token Service Provider Licensing Guidelines,' proposing new policies for companies, institutions, and individuals involved in virtual assets. Since Hong Kong issued the Virtual Asset Declaration in 2022, it has actively welcomed the industry to develop in Hong Kong. According to unofficial statistics, there are already over a thousand Web3 companies based in Hong Kong. If you are currently in Singapore working in this industry and intend to relocate your headquarters and personnel to Hong Kong, I am willing to provide assistance. Welcome to develop in Hong Kong!"
Cobo COO, former PAG Alliance Investment Group's Chief Legal Advisor Lily, believes that the panic caused by this policy has been exaggerated. This policy maintains MAS's usual regulatory style, mainly affecting unlicensed exchanges' front offices and operational teams in Singapore. It will not affect companies like Cobo that have obtained exemptions and those that have already obtained licenses, nor will it affect institutions whose business scope is not within the scope of license regulation.
According to the MAS official website, 24 companies such as Cobo, Antalpha, Ceffu, and Matrixport are on the exemption list, and 33 companies like Bitgo, Circle, Coinbase, GSR, Hashkey, and OKX SG have obtained DTSP licenses.
For these licensed and exempted companies, the new policy has created a more fair competitive environment, enhanced the reputation value of licensed institutions, and laid the foundation for global expansion.
Correspondingly, as the era of regulatory arbitrage ends, some offshore crypto enterprises based in Singapore have started to relocate to Hong Kong, Dubai, Malaysia, etc.
Adam believes that crypto professionals leaving Singapore is a major trend, and this policy is more likely to accelerate this process.
"Singapore's living costs are high, and it's boring. More importantly, there are few earning opportunities now. If I want to live in Japan, I want to make money in Dubai."
Once known as "the Jerusalem of crypto Jews," Singapore is now closing its doors, forcing crypto Jews to continue their wanderings.
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