Since June 30, Singapore has begun implementing new crypto licensing regulations, forcing dozens of digital asset companies to shut down or face heavy penalties. This regulation has closed a loophole that allowed crypto services catering to foreign customers to operate without oversight.
Strict regulations and a wave of migration
The Monetary Authority #Singapore (MAS) set a deadline of June 30 with no extensions. This new legal framework requires companies providing cryptocurrency services to foreign customers to have a full license, comply with anti-money laundering measures, have local compliance officers, and conduct cybersecurity audits. Violations can incur fines of up to $185,000 and the possibility of imprisonment.
Calvin Shen, Commercial Director of Hex Trust, stated that this move aims to "protect the integrity of the regulatory framework" and "shape the global dialogue on substance-based regulation." However, this has triggered a wave of migration of companies in the industry. Smaller firms have shut down, while larger names like Bitget and Bybit are seeking to relocate to Dubai or Hong Kong, where the regulatory framework appears to be more flexible.
"Cross-border" and challenges for other centers
According to Chengyi Ong from Chainalysis, MAS's approach exceeds international standards, stemming from discomfort with licensing entities that operate "entirely abroad" but have ties to Singapore.
Although other financial centers may be more lenient, Singapore's model "provides structure and clarity," reinforcing the idea that licensing is not just about form but also function, ensuring companies "not only comply on paper but also operate effectively in practice." Other centers may face similar challenges in balancing attracting business and managing risk. #anhbacong