When Singapore started to drive away people in the cryptocurrency world

Singapore, once a paradise for Web3, has begun 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)", and the document has a very tough attitude:

All crypto service providers registered or operating in Singapore, If they have not obtained a DTSP license, they must stop providing services to overseas customers before June 30, 2025.

There is no transition period for this regulation, and violators will be punished according to law. Companies found to have violated the law will face fines of up to 250,000 Singapore dollars (200,000 US dollars) and up to three years in prison.

This policy is like a bolt from the blue, causing many Singaporean cryptocurrency practitioners to tremble.

As the base camp of Web3 in Asia, Singapore has always played the role of a perfect place for "regulatory arbitrage".

In the past, Singapore implemented a "differential" regulatory strategy, allowing companies registered in Singapore to freely provide services to overseas customers, and only had stricter regulatory requirements for businesses facing the local market.

Especially when major markets such as China's comprehensive ban and the US SEC's increased enforcement efforts tightened regulation, Singapore played the role of a safe haven in a timely manner, providing a safe foothold for many crypto exchanges, funds, and project parties, leading to waves of crypto enterprise migration. Even Singapore's sovereign fund Temasek has participated in investing in crypto companies such as FTX and Immutable, consolidating Singapore's position as Asia's crypto center.

However, the clarification of the regulatory policy this time has gradually plugged the loophole of "regulatory arbitrage".

According to the DTSP final regulatory response document issued by Singapore MAS, the most stringent key points are:

1. Comprehensive management of cross-border business: Regardless of whether the service object is local or overseas customers in Singapore, as long as digital token-related business is carried out in Singapore, a DTSP license must be obtained, which directly cuts off the regulatory arbitrage path of "registering in Singapore but only serving overseas customers" in the past.

2. Extremely broad definition of business premises: MAS defines "business premises" as "any place in Singapore used by the licensee to conduct business", even including movable stalls. This definition covers almost all possible business premises, regardless of size.

3. Dual coverage of individuals and institutions: The regulatory objects include both individuals or partnerships operating in business premises in Singapore, as well as Singapore companies conducting digital token service business outside Singapore, achieving full coverage of entities.

In addition, although MAS stated that it is acceptable for employees of overseas companies to work from home, the definition of "employees" is vague. Whether the project founders and shareholders are employees is entirely at the discretion of MAS.

Why did Singapore MAS suddenly strike hard?

This is not a sudden policy attack by the Singapore Monetary Authority on cryptocurrency companies. As early as 2022, Singapore MAS introduced the Financial Services and Markets Act, Part 9 of which is the regulation of cryptocurrencies, and then carried out many public consultations and drafts for comments.

According to the consultation document, MAS's core consideration is that"some cryptocurrency companies may damage Singapore's reputation."

The original text stated, "Due to the internet-based and cross-border characteristics of digital token services, digital token service providers (DTSPs) are more vulnerable to money laundering/terrorist financing (ML/TF) risks... The main risk posed by DTSPs to Singapore will be reputational risk, that is, if they are involved in or abused for illegal purposes, they may damage Singapore's reputation."

The origin of everything may have to go back to 2022, when Temasek's investment in cryptocurrency exchange FTX and local crypto fund Three Arrows Capital collapsed, severely damaging Singapore's financial reputation. Singapore's then-Finance Minister Lawrence Wong (now Prime Minister) publicly stated thatthe investment caused reputational damage, and Temasek subsequently punished the investment team and senior management with salary cuts.

Which cryptocurrency companies will be affected under the latest regulations?

According to the consultation document, all entities related to crypto asset transactions must be licensed, including cryptocurrency trading platforms, cryptocurrency custody, cryptocurrency transfers, cryptocurrency issuance...

June 30, 2025, the deadline is approaching, and panic from social media such as WeChat Moments has enveloped the hearts of Singaporean crypto practitioners, but more emotions are confused.

"I didn't know about the relevant policies before, but WeChat Moments exploded all of a sudden. At present, the views of all parties are different. I can only wait and see. At worst, I will leave Singapore and go to Malaysia next door," said Adam (pseudonym), a practitioner of the project.

Kevin, a practitioner at a crypto exchange, was very upset.his company had already made plans to move the office to Hong Kong, but he did not know the specific timetable. He had been living in Singapore for two years and was preparing to apply for Singapore Permanent Residency (. He was filled with regret and reluctance after this incident.

Previously, Hong Kong Legislative Council member Wu Jiezhuang posted on social media to recruit Singaporean crypto practitioners to settle in Hong Kong. He said: "Singapore earlier issued the "Digital Token Service Provider Licensing Guidelines", which proposed new policies for related companies, institutions and personnel engaged in virtual assets. Since the release of the Virtual Asset Declaration in 2022, Hong Kong has actively welcomed the industry to develop in Hong Kong. According to informal statistics, thousands of Web3 companies have landed in Hong Kong. If you are currently engaged in a related industry in Singapore and intend to relocate your headquarters and personnel to Hong Kong, I am willing to provide assistance and welcome you to develop in Hong Kong!"

Lily, COO of the crypto custody platform Cobo and former general counsel of PAG Pacific Alliance Investment Group, believes that the policy has exaggerated the panic sentiment. The policy maintains the consistent regulatory style of MAS. The main affected are the Singapore front desk and actual operation team of unlicensed exchanges, and will not affect Cobo The new policy will not affect the companies that have been exempted and licensed, and those whose business scope is not within the scope of license supervision.

According to the official website of Singapore Mas, 24 companies including COBO, ANTALPHA, CEFFU, MATRIXPORT are on the exemption list, and 33 companies including BITGO, CIRCLE, COINBASE, GSR, Hashkey, OKX SG have obtained DTSP licenses.

For these licensed and exempted companies, the new policy has created a fairer competitive environment, enhanced the reputation value of licensed institutions, and laid the foundation for global expansion.

Correspondingly, when the era of regulatory arbitrage ended, some offshore crypto companies based in Singapore have begun to migrate to Hong Kong, Dubai, Malaysia and other places.

Adam believes that it is a general trend for crypto practitioners to leave Singapore, and this policy is more to accelerate this process.

"The cost of living in Singapore is high and boring, and more importantly, there are too few opportunities to make money now. If you want to live, go to Japan, and if you want to make money, go to Dubai."

Once upon a time, Singapore was called the "Jerusalem of Crypto Jews", but now its gates are tightened, and crypto Jews have to live by the water and grass and continue to wander.