The end of regulatory arbitrage in Singapore

Source: Crypto Fat Cat Da Zhuang Official Account
The Monetary Authority of Singapore (MAS) dropped a big bomb on May 30, 2025, and released a response document for the new DTSP (Digital Token Service Provider) regulations. It officially started on June 30, without a buffer period at all! This wave of operations directly caused the entire Asian Web3 circle to explode. Many people have not yet reacted. This policy may completely change the industry landscape. Simply put, Singapore is going to "blast out" all the unlicensed Web3 players. The former "Asian Crypto Paradise" may have to say goodbye!

Former glory: Web3 Paradise

Looking back to 2021, Singapore was the "dream place" for Web3 entrepreneurs. China banned cryptocurrencies, the US SEC found fault everywhere, but Singapore opened its doors to welcome everyone. Big players like Three Arrows Capital, Alameda Research, and FTX Asia Headquarters all came here to settle down. Why? 0% capital gains tax, coupled with MAS's attitude of "embracing innovation" at the time, is simply a treasure land for regulatory arbitrage! Registering a company in Singapore can legally and compliantly serve global users, and backed by the signboard of Singapore's financial center, Web3 practitioners are scrambling to come.

New regulations are coming: No license? Don't even think about getting by here!

Now, MAS has turned its back, and the new DTSP regulations have slammed the regulatory door shut. The core is just one sentence: No license, no matter who you are, don't even think about doing digital token business in Singapore!

What is DTSP? Simply put, it is any service provider related to digital tokens (such as cryptocurrencies), divided into two categories:

Individuals or companies with "places of business" in Singapore;

Companies registered in Singapore, even if their business is overseas.

This definition sounds simple, but the word "place of business" is a knife hidden! MAS said that the business premises is "any place used to conduct business", including mobile places such as roadside stalls! In other words, as long as you do digital token-related business anywhere in Singapore (even on the sofa at home), it is illegal without a license! Whether you serve local or overseas customers, you must abide by this rule.

Is it illegal to work from home?

This question makes many people panic. Baker McKenzie Law Firm specifically asked MAS: "Now that remote work is so common, is it illegal to work for overseas companies at home?" MAS's answer is quite cold: If you provide digital token services to overseas customers anywhere in Singapore (including home), you must apply for one if you don't have a license! However, they also left a small gap: If you are an employee of an overseas company and simply work from home, it is your boss's business, and you don't need to apply for a license personally. But if you work in a shared office space or someone else's office, you may be arrested. The question is: Who is considered an "employee"? Does the founder count? Does the shareholding count? MAS has the final say, and it is so vague that it drives people crazy!

Even KOLs can’t escape?

What’s even more exaggerated is that MAS’s definition of “digital token services” is so broad that even publishing a research report or writing an analytical article may be counted! For example, if you are a KOL and you publish a post in Singapore analyzing the investment value of a certain token, in theory, you may be breaking the law without a license!

The Blockchain Association of Singapore directly asked MAS: “Do traditional research reports count? How to distinguish them?” MAS did not give a clear answer, which made content creators tremble with fear.

Who is the most dangerous?

With this wave of new regulations, the following groups should be careful:

Individuals: independent developers, project consultants, market makers, miners, KOLs, community operators, project founders, BD, sales... none of them can escape.

Institutions: unlicensed exchanges (CEX, DEX), DeFi projects, NFT platforms, and crypto wallets are all high-risk.

Conclusion: The era of "regulatory arbitrage" in Singapore is over

MAS is serious this time, and it is clear that it wants to clear out all non-compliant Web3 players. What about luxury offices and sofas at home? As long as they are related to digital tokens, don't even think about it without a license. Moreover, the definitions of "business premises" and "business behavior" are so vague that MAS is likely to catch a few typical "killing the chicken to scare the monkey" first.

Want to get a license at the last minute? Difficult! MAS said that the license approval is "extremely cautious" and basically there is no chance. Singapore's Web3 golden age is completely over, and the next game is a game of big fish eating small fish. Project parties and institutions are now thinking not about "staying or not", but "when to withdraw" and "where to go".

To summarize:

Singapore has changed from a "friendly paradise" of Web3 to a "regulatory iron fist". The new regulations will take effect on June 30. Don't even think about getting a license here without a license. Even KOLs may step on thunder when posting an analysis post. There may be exemptions for working from home, but the definition is vague and MAS has the final say. Web3 players, think about the retreat quickly!

Source:

https://www.mas.gov.sg/publications/consultations/2024/consult-paper-dtsp