Source: TechFlow
Original Title: When Singapore Starts Driving Out Crypto People
Once a Web3 paradise, Singapore 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)," with a very strict stance: all crypto service providers registered or operating in Singapore must cease providing services to overseas customers by June 30, 2025, unless they obtain a DTSP license.
The regulation has no transition period, and violators will be punished according to law. Companies found to be in violation will face fines up to 250,000 Singapore dollars (200,000 USD) and imprisonment for up to three years. This policy is like a bolt from the blue, causing many Singapore crypto practitioners to tremble.
As the headquarters of Asian Web3, Singapore has long played the role of a "regulatory arbitrage" perfect location. Singapore previously implemented a "separate internal and external" regulatory strategy, allowing companies registered in Singapore to freely provide services to overseas customers, with only stricter regulatory requirements for local market businesses.
Especially when major markets like China implemented comprehensive bans and the US SEC increased enforcement, Singapore timely played the role of a safe haven, providing a safe landing point for numerous crypto trading platforms, funds, and project teams, leading to waves of crypto enterprise migration. Even Singapore's sovereign wealth fund Temasek had invested in crypto enterprises like FTX and Immutable, solidifying Singapore's position as the Asian crypto center.
However, this clear regulatory policy gradually plugged the "regulatory arbitrage" loopholes. According to MAS's final regulatory response document, the most stringent key points are:
· Comprehensive cross-border business management: Whether serving local or overseas customers, any digital token-related business conducted within Singapore requires a DTSP license, directly cutting off the past regulatory arbitrage path of "registering in Singapore but only serving overseas customers".
· Extremely broad definition of business premises: MAS defines "business premises" as "any location in Singapore used by the license holder to conduct business," even including movable booths. This definition almost covers all possible business locations, regardless of size.
· Dual coverage of individuals and institutions: Regulatory targets include both individuals or partnerships operating in Singapore's business premises and Singapore companies conducting digital token services overseas, achieving comprehensive subject coverage.
Additionally, while MAS states that overseas company employees working from home can be acceptable, the definition of "employees" is blurry, with project founders and shareholders' status as employees entirely at MAS's discretion.
Why did Singapore's MAS suddenly strike hard? This is not a sudden policy attack on crypto companies. As early as 2022, MAS introduced the Financial Services and Markets Act, with Part Nine dedicated to crypto regulation, followed by multiple public consultations and draft reviews. The May 30 document is a response to consultations, detailing specific regulatory methods, regulations, notifications, and DTSP licensing guidelines.
According to the consultation document, MAS's core consideration is that "some crypto companies might damage Singapore's reputation".
The original text states, "Due to the internet-based and cross-border nature of digital token services, 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, potentially damaging Singapore's reputation if they are involved in or misused for illegal purposes."
The origin might trace back to 2022 when Temasek-invested crypto trading platform FTX and local crypto fund Three Arrows Capital collapsed, severely damaging Singapore's financial reputation. Then-Finance Minister Heng Swee Keat (now Prime Minister) publicly stated that the investment caused reputational damage, and Temasek subsequently imposed salary cuts on the investment team and senior management.
Under the latest regulations, which crypto companies will be affected? According to the consultation document, all entities related to crypto asset trading require licensing, including crypto trading platforms, crypto custody, crypto transfers, crypto issuance... With the deadline of June 30, 2025, approaching, panic from social media circles envelops Singapore's crypto practitioners, with more feelings of confusion.
"I didn't know about the policy before, and suddenly my social circle exploded. Currently, opinions vary, and I can only wait and see. At worst, I'll leave Singapore and go to neighboring Malaysia," said project practitioner Adam (pseudonym). Kevin, a crypto trading platform employee, was very melancholic. Their company has already planned to move their office to Hong Kong, but he doesn't know the specific timeline. Having been a Singapore resident for 2 years and preparing to apply for Permanent Residency (PR), he feels regretful and reluctant about this turn of events.
Previously, Hong Kong legislator Wu Jiezhuang posted on social media to attract Singapore crypto practitioners to settle in Hong Kong, stating: "Singapore recently released the 'Digital Token Service Provider Licensing Guidelines,' introducing new policies for companies, institutions, and personnel involved in virtual assets. Since Hong Kong's virtual asset declaration in 2022, we've actively welcomed industry development. Unofficially, over a thousand Web3 companies have already landed in Hong Kong. If you're currently in the industry in Singapore and interested in moving your headquarters and personnel to Hong Kong, I'm willing to provide assistance and welcome you to develop here!"
Lily, COO of crypto custody platform Cobo and former legal counsel at PAG Investments, believes the policy's panic has been exaggerated. She maintains that the policy follows MAS's consistent regulatory style, primarily affecting non-licensed trading platforms' Singapore front-ends and operational teams. It won't impact exempted companies like Cobo or licensed enterprises, nor institutions outside the licensing regulatory scope.
According to MAS's official website, 24 companies including COBO, ANTALPHA, CEFFU, and MATRIXPORT are on the exemption list, while 33 companies like BITGO, Circle, Coinbase, GSR, Hashkey, and OKX SG have obtained DTSP licenses.
For these licensed and exempted enterprises, the new policy actually creates a fairer competitive environment, enhances licensed institutions' reputation value, and lays the groundwork for global expansion. Correspondingly, as the era of regulatory arbitrage ends, some offshore crypto companies based in Singapore have begun migrating to Hong Kong, Dubai, Malaysia, and other locations.
Adam believes crypto practitioners leaving Singapore is a major trend, and this policy merely accelerates the process. "Singapore is expensive, boring, and most importantly, there are few money-making opportunities. I want to live in Japan and make money in Dubai." Once called the "Jerusalem of crypto Jews," Singapore's doors are now tightening, forcing crypto practitioners to continue their nomadic existence.
