Core events
On May 30, 2025, the Monetary Authority of Singapore (MAS) released new regulations for digital token service providers (DTSP), effective June 30 with no buffer period, completely ending Singapore's 'crypto-friendly' image.
Regulatory core: Comprehensive crackdown on unlicensed operations
Extremely high licensing threshold: Requires physical office, local directors, strict KYC, effectively excluding small to medium-sized teams
Global jurisdiction: Even if serving overseas clients, a license is required if operating in Singapore
Blurred enforcement boundaries: Working from home, shared spaces, and KOL publishing research reports may all be classified as 'illegal operations'
Industry impact
Wave of project withdrawals: Unlicensed institutions face the dilemma of 'compliance equals death, non-compliance equals escape'
Content creation risks: Analysts and KOLs publishing token research reports need licenses
Market liquidity shrinkage: Singapore accounts for 15% of Asia's crypto trading volume, new regulations may trigger capital outflows
Deep-seated contradictions: The end of the regulatory arbitrage era
Past: Singapore attracted institutions like Three Arrows and FTX with 0% capital gains tax and loose regulation
Turning point: In 2022, Temasek suffered a loss of 275 million USD due to FTX, triggering a policy shift
I. Core policy points
Scope of application:
All digital token service providers (DTSP) within the territory
Overseas institutions' business premises in Singapore
Covering the entire business chain including trading, custody, consulting, etc.
Key terms:
Mandatory licensing system (effective June 30, 2025)
No transition period arrangements
Retrospective regulatory powers
II. Changes in regulatory focus
Extension of business premises definition:
Including traditional office premises, shared spaces
Covering working from home (depending on specific circumstances)
Temporary business activity premises
Clarification of business scope:
Digital token issuance and trading
Asset management services
Investment consulting and research analysis
III. Compliance challenge analysis
Impact on institutions:
License application costs surge (estimated at 500,000 to 1 million USD)
Challenges in hiring local directors and compliance officers
Restrictions on business scope (especially retail customer services)
Impact on individuals:
Freelancers must obtain licenses
Blurred boundaries of KOL content creation compliance
Increased complexity in tax reporting
IV. Industry response strategies
Short-term solutions:
Business structure restructuring
Physical relocation (Middle East/Europe)
Customer group screening
Long-term layout:
Building a compliance system
License application planning
Investment in regulatory technology
V. Global regulatory trend assessment
Singapore's positioning shift:
From 'innovation experimentation' to 'compliance benchmark'
Pioneers of regulatory technology applications
Institutional market orientation
Comparison of alternative hubs:
UAE: Licensing tiered system
Switzerland: Fintech friendly
Hong Kong, China: Retail market restrictions
VI. In-depth impact assessment
Changes in market structure:
Increase in institutional client share
Clearing of small and scattered projects
Surge in demand for compliance services
Balancing innovation and regulation:
Exploration of DeFi compliance pathways
Cross-border regulatory collaboration
Digital identity solutions
VII. Professional Advice
Compliance first:
Immediate compliance assessment
Establishing regulatory communication channels
Improving compliance team construction
Risk control:
Optimization of operational structure
Regulatory technology applications
Emergency plan formulation
Industry warnings
"When regulation issues licenses with an 'extremely cautious' attitude, it means the industry has shifted from 'innovation experimentation' to 'risk control.'"
—— Anonymous comment from a compliance lawyer in Singapore
