Once hailed as the 'Web3 paradise of Asia', Singapore is now facing a major industry reshuffle.
On May 30, 2025, the Monetary Authority of Singapore (MAS) officially released the regulatory guidelines for Digital Token Service Providers (DTSP), clearly requiring all unlicensed cryptocurrency companies to stop providing services to overseas clients by June 30, or face a fine of up to 250,000 SGD (about 200,000 USD) and three years imprisonment.
This policy is like a heavy blow, catching cryptocurrency practitioners who rely on 'regulatory arbitrage' off guard.
Is Singapore's 'golden age of cryptocurrency' coming to an end?
In recent years, Singapore has attracted a large number of cryptocurrency companies with its loose regulatory environment. Its policy of 'differentiation between local and overseas' allows companies to register in Singapore while freely serving overseas clients, imposing strict regulations only on local business.
Against the backdrop of a complete ban on cryptocurrency trading in China and ongoing high-pressure regulation by the SEC in the U.S., Singapore once became a safe haven for the cryptocurrency industry. Institutions like FTX and Three Arrows Capital had set up headquarters here, and Singapore's sovereign wealth fund Temasek had invested in several cryptocurrency companies, further solidifying its position as an Asian cryptocurrency hub.
However, following events such as the FTX collapse impacting Singapore's financial reputation, the regulatory stance gradually shifted to a tougher one. In 2022, MAS clarified the cryptocurrency regulatory framework in the Financial Services and Markets Act (FSMA), which will be fully implemented in June 2025 after a three-year transition period.
Three core changes to the new regulations close the loopholes for 'regulatory arbitrage'.
1. Comprehensive management of cross-border business.
Regardless of whether the service targets local Singaporean or overseas clients, as long as operations are conducted within Singapore, a DTSP license must be held, completely ending the 'only serving overseas' arbitrage model.
2. The definition of 'business premises' is extremely broad.
MAS defines 'business premises' as 'any location used for conducting business', including temporary stalls, shared offices, and even working from home (unless it is a formal employee of an overseas company).
3. Covering both individuals and institutions.
The regulatory targets include not only locally operated businesses but also companies registered in Singapore that serve overseas, ensuring comprehensive coverage.
Who is affected? Licensed institutions benefit, unlicensed companies face exit.
- Licensed or exempt companies (such as Coinbase, OKX, HashKey, etc.): The new regulations actually strengthen their competitive advantage and enhance market trust.
- Unlicensed institutions (especially exchanges, custodial platforms, and token issuance projects): Must stop services by June 30, or face severe penalties.
Some companies have already begun relocating to places like Hong Kong, Dubai, and Malaysia. Hong Kong Legislative Council member Wu Jiezhuang even publicly welcomed Singapore's cryptocurrency practitioners to 'shift to Hong Kong'.
Industry reaction: Panic and opportunity coexist.
- Panic is spreading: Some practitioners say the policy came suddenly and are considering leaving Singapore.
- The trend toward compliance is clear: Licensed institutions like Cobo believe that the new regulations are just a continuation of MAS's consistent regulatory style, which will benefit the healthy development of the industry in the long run.
Conclusion: Is the 'Singapore Model' in the cryptocurrency industry coming to an end?
The tightening of regulations in Singapore marks the end of the 'wild growth' era. In the future, only compliant businesses will be able to establish a foothold in Singapore, while institutions relying on regulatory arbitrage will be forced to seek new 'safe havens'.
For the global cryptocurrency industry, this may be a signal: stricter regulations have become the trend, and compliance is the way to survive.