When Singapore starts driving people from currency circles

Author: Shenchao TechFlow

The former Web3 paradise Singapore has begun to drive people away.

On May 30, the Monetary Authority of Singapore (MAS) officially released the final policy guide for "Digital Token Service Providers (DTSP)" with a very tough attitude:

All crypto service providers registered or operated in Singapore, if they do not obtain a DTSP license, must cease providing services to overseas customers by June 30, 2025.

The provision does not have a transition period, and violators will be punished according to law, and companies found to have violated the law will face fines of up to 250,000 Singapore dollars (USD 200,000) and a maximum of three years in prison.

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

As the Asian Web3 base camp, Singapore has always played the perfect place for "regulatory arbitrage".

Singapore has implemented a regulatory strategy of "internal and external differences" in the past, allowing companies registered in Singapore to freely provide services to overseas customers, and has only stricter regulatory requirements for businesses facing the local market.

Especially when China imposed a comprehensive ban and the US SEC increased its law enforcement efforts, Singapore played a safe haven role in a timely manner, providing a safe ending point for many crypto exchanges, funds, and project parties, leading to waves of migration of crypto enterprises. Even Singapore's national sovereign fund Temasek has participated in investing in crypto companies such as FTX and Immutable, consolidating Singapore's position as the Asian crypto center.

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

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

1. Fully managed cross-border business : Whether the service targets are local or overseas customers in Singapore, as long as they conduct digital token-related business in Singapore, they must obtain a DTSP license, which directly cuts off the past regulatory arbitrage path of "registering in Singapore but only serving overseas customers".

2. The business premises are extremely broad definition : MAS defines a “business premises” as “any location used by a licensee in Singapore to conduct business” and even includes movable stalls. This definition covers almost every possible business place, regardless of size.

3. Dual coverage of individuals and institutions : The regulatory targets include both individuals or partnerships operating in Singapore’s business premises, as well as Singapore companies that carry out digital token service business outside Singapore, achieving full coverage of the subject.

In addition, although MAS stated that overseas company employees are acceptable to work from home, the definition of "employees" is vague, and whether the project founder and shareholding holders belong to employees is entirely at MAS' discretion.

Why did Singapore MAS suddenly strike hard?

This is not a sudden policy attack by the Singaporean financial authorities on cryptocurrency companies. As early as 2022, Singapore MAS issued the Financial Services and Markets Act, which was the ninth part of which was the regulation of cryptocurrencies, and then conducted several public consultations and draft comments. The document on May 30 responded to the consultations, and elaborated on specific regulatory methods, regulations, notifications and DTSP licensing guidelines in detail.

According to the consulting documents, the core consideration of MAS is that “some cryptocurrency companies may damage Singapore’s reputation.”

The original text stated, “DTSPs are more likely to face money laundering/terrorist financing (ML/TF) risks due to the internet and cross-border nature… The main risk that DTSPs pose to Singapore will be reputational risks, i.e., it may damage Singapore’s reputation if they are involved or abused for illegal purposes.”

The origin of everything may have to go back to 2022. The cryptocurrency exchange FTX invested by Temasek and the local crypto fund Sanjiang Capital have burst, hitting Singapore's financial reputation. Hwang Hsung-Cai (current Prime Minister), then Singapore's Finance Minister, publicly stated that the investment caused reputational damage, and Temasek subsequently imposed salary cuts on the investment team and senior management.

Which cryptocurrency companies will be affected under the latest regulations?

According to the consulting documents, all entities related to crypto asset transactions must be licensed, including cryptocurrency trading platforms, cryptocurrency custody, cryptocurrency transfer, cryptocurrency issuance...

On June 30, 2025, the deadline approached, and panic from social media such as Moments was shrouded in the hearts of Singaporean crypto practitioners, but more emotions were confused.

"I didn't know about the relevant policies before, but my circle of friends suddenly exploded. At present, all parties have different opinions, so I can only wait and see first. At worst, I can leave Singapore and go to Malaysia next door," said Adam (pseudonym), a practitioner from the project party.

Kevin, a crypto exchange practitioner, was very sad. The company had already made plans to move its office to Hong Kong as a whole, but he did not know the specific timetable. He had been in Singapore for 2 years and was preparing to apply for Singapore permanent residence ( PR ). Due to this change, he felt regretful and reluctant to leave.

Previously, Hong Kong Legislative Council member Wu Jiezhuang posted on social media to attract Singaporean crypto practitioners to settle in Hong Kong. He said: "Singapore previously issued the "Guidelines for Licensing of Digital Token Service Providers", 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 been launched in Hong Kong. If you are currently engaged in related industries in Singapore and are interested in moving your headquarters and personnel to Hong Kong, I am willing to provide assistance and welcome to develop in Hong Kong!"

Lily, the crypto-hosting platform Cobo COO and former general counsel for PAG Taimeng Investment Group, believes that the policy has been excessively amplified by the panic. The policy maintains the consistent regulatory style of MAS. The main impacts are the Singapore front desk and substantive operation team of non-licensed exchanges. It will not affect companies including Cobo that have been exempted and companies that have obtained licenses, nor will it affect those institutions whose business scope is not regulated.

According to Singapore Mas official website information, 24 companies including COBO, ANTALPHA, CEFFU, MATRIXPORT are all 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 instead created a more level playing field, 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 crypto practitioners leave Singapore is a major trend, and this policy is more to accelerate the process.

"The cost of living in Singapore is high and boring. What's more, the opportunity to make money is too few now. I want to live in Japan and go to Dubai."

Once upon a time, Singapore was called "Jerusalem of the Encrypted Jews". Now its doors are tightening, and the Encrypted Jews have to live and continue to wander.