When Singapore Begins to Drive Away Cryptocurrency People

The once Web3 paradise Singapore is 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 firm stance in the document:

All cryptocurrency service providers registered or operating in Singapore must cease providing services to overseas clients by June 30, 2025, if they have not obtained a DTSP license.

There is no transition period for this regulation, and violators will be punished according to the law, with companies found in violation facing fines of up to SGD 250,000 (USD 200,000) and imprisonment for up to three years.

This policy hit like a bolt from the blue, causing many cryptocurrency practitioners in Singapore to feel a jolt.

As Asia's Web3 hub, Singapore has always played the role of a "regulatory arbitrage" haven.

In the past, Singapore implemented a regulatory strategy of "differentiating between domestic and foreign," allowing registered companies in Singapore to freely provide services to overseas clients, with stricter regulatory requirements only for businesses targeting the local market.

Especially when major markets like China implemented a comprehensive ban and the U.S. SEC intensified enforcement, Singapore timely played the role of a safe haven, providing a secure landing point for numerous cryptocurrency exchanges, funds, and project parties, leading to waves of cryptocurrency companies relocating. Even Singapore's sovereign wealth fund Temasek has invested in cryptocurrency companies like FTX and Immutable, solidifying Singapore's position as Asia's cryptocurrency center.

However, the clarity of this regulatory policy has gradually plugged the loopholes of "regulatory arbitrage."

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

1. Comprehensive management of cross-border business: Regardless of whether the service targets local or overseas clients, any digital token-related business conducted within Singapore must obtain a DTSP license, directly cutting off the previous regulatory arbitrage path of "registered in Singapore but only serving overseas clients."

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

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

Additionally, although MAS stated that overseas company employees working from home would be accepted, the definition of "employees" is vague, leaving it entirely to MAS's discretion whether project founders and shareholders qualify as employees.

Why did Singapore MAS suddenly strike hard?

This is not a sudden policy attack by the Singapore financial authorities on cryptocurrency companies. As early as 2022, MAS introduced the Financial Services and Markets Act, with the ninth part specifically addressing cryptocurrency regulation, followed by multiple public consultations and drafts for feedback. The document released on May 30 is a response to the consultations and elaborates on specific regulatory methods, regulations, notices, and DTSP licensing guidelines

According to the consultation document, the core consideration of MAS is that "some cryptocurrency businesses may harm 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 susceptible to money laundering/terrorist financing (ML/TF) risks... The main risk posed by DTSPs to Singapore will be reputational risk, meaning that if they are involved in or misused for illegal purposes, it may damage Singapore's reputation."

The origin of everything may trace back to 2022, when the cryptocurrency exchange FTX, invested by Temasek, and the local crypto fund Three Arrows Capital collapsed, severely impacting Singapore's financial reputation. The then Finance Minister, Huang Xuncai (now Prime Minister), publicly stated that this investment caused reputational damage, and Temasek subsequently imposed salary cuts on the investment team and senior management.

Which cryptocurrency businesses will be affected under the latest regulations?

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

With the deadline of June 30, 2025 approaching, panic from social media such as WeChat Moments looms over Singapore's crypto practitioners, but more emotions are confusion.

"I didn't know about the relevant policies before; it just exploded in my WeChat Moments. Currently, opinions vary, and we can only wait and see. At worst, we can leave Singapore and go to neighboring Malaysia," said Adam (pseudonym), a practitioner from a project team.

Kevin, a practitioner from a cryptocurrency exchange, expressed his deep concern, stating that their company has already made plans to relocate the entire office to Hong Kong, but he does not know the specific timeline. Having resided in Singapore for two years, he was preparing to apply for Singapore permanent residency (PR), and now feels regret and reluctance due to this change.

Previously, Hong Kong Legislative Council member Wu Jiezhuang posted on social media to attract Singapore's crypto practitioners to settle in Hong Kong. He stated, "Singapore recently released the 'Guidelines for Licensing Digital Token Service Providers,' introducing new policies for companies, institutions, and personnel engaged 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 informal statistics, thousands of Web3 companies have already settled in Hong Kong. If you are currently engaged in the relevant 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 legal counsel of PAG, believes that the policy has exaggerated panic. She stated that the policy maintains MAS's consistent regulatory style, and the main impact will be on the non-licensed exchanges' front and substantive operating teams in Singapore. It will not affect companies that have already obtained exemptions, such as Cobo, or those that have already obtained licenses, nor will it affect institutions whose business scope is outside the licensing regulatory scope According to the information on the official website of the Monetary Authority of Singapore (MAS), 24 companies including COBO, ANTALPHA, CEFFU, and MATRIXPORT are on the exemption list, while 33 companies including BITGO, CIRCLE, COINBASE, GSR, Hashkey, and OKX SG have obtained the DTSP license.

For these licensed and exempt companies, the new policy has created a more equitable competitive environment, enhanced the reputational value of licensed institutions, and laid the foundation for global expansion.

Correspondingly, as the era of regulatory arbitrage comes to an end, some offshore crypto companies based in Singapore have begun to migrate to places like Hong Kong, Dubai, and Malaysia.

Adam believes that the departure of crypto practitioners from Singapore is a major trend, and this policy is more about accelerating that process.

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

Once upon a time, Singapore was referred to as the "Jerusalem of crypto Jews." Now, as its doors tighten, crypto Jews have to follow the water and grass, continuing to wander.

Author of this article: ShenChao TechFlow, Source: [ShenChao TechFlow](https://mp.weixin.qq.com/s?__biz=Mzg4MTcwOTE5Mg==&mid=2247487271&idx=1&sn=9eb7235bc92c05fec16ca80bd6c37c4c&chksm=ce274ac648c87c1b1c9c5f1b671fef0a44aae23dde9d4f71e472931bd8f934ac9a4b4bd3c024&mpshare=1&scene=1&srcid=0608tiM5C2u55s1WCYOh93Ea&sharer_shareinfo=f1905d417eed01fcbb4a6dd35db991a1&sharer_shareinfo_first=f1905d417eed01fcbb4a6dd35db991a1&exportkey=n_ChQIAhIQ7zsxiO5S6CZyanMqIcgj5xL4AQIE97dBBAEAAAAAAAbuCakbFNkAAAAOpnltbLcz9gKNyK89dVj0d5yceDCP2QYM1XDncsBJOM%2F3ds0TCn5lz9UelmX7Hl0ubXtItiORDQfVsqb8aY8R%2BOiMYldp9n5FoA3suXnZz14zB58pRrfJqekAL%2FNCSBh9kG4laIasP6kLaZHsK0IqTzn%2FF8sQxKQHTKNiqUp3ulSAlW2TOV%2FIKzDpRDs586Gn9EpVRhVymFMbWqdDay9zGMkPKCHtbzbGAtMbmUZAKuIQ5tGID%2Bpssfihwsp%2BQQfae4%2FWv3ydZhV9DsW8f1GM9ZZ%2FwkpS18xeGRereAiec87l&acctmode=0&pass_ticket=TntegM2AJYd87ZSXgWoR6Ho bRJhB3F7uVRj4v26ylUBtiQeq4mAH3ifsKdbm74jC&wx_header=0#rd), Original title: "When Singapore Starts to Drive Away Cryptocurrency People"

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