Once, Singapore was the 'regulatory arbitrage paradise' for Asia's Web3, with lenient policies attracting giants like Three Arrows Capital and FTX Asia headquarters. However, on May 30, 2025, a new regulation from the Monetary Authority of Singapore completely ended this era: starting June 30, unlicensed digital token service providers are prohibited from operating, with no grace period! Violators face fines of up to $200,000 and three years of imprisonment.
Three major 'fatal blows' of the new regulations
1. Comprehensive global business regulation
Regardless of whether the service targets are local Singaporean or overseas clients, as long as business activities involving token trading, custody, transfers, etc., are conducted within Singapore, a DTSP license must be held; the former regulatory loophole of 'only serving overseas clients' has been completely closed.
2. Comprehensive coverage of regulatory subjects without blind spots
Individuals: developers, project advisors, KOLs, market makers, and even analysts publishing token research reports could be violating the law.
Institutions: unlicensed exchanges, DeFi protocols, NFT platforms, etc.
Cryptocurrency companies rushed 'overseas' overnight, while licensed operators sit securely: 33 licensed companies and 24 exempt institutions like Cobo, Coinbase, and OKX are the biggest winners, as the new regulations clear out unlicensed competitors. Unlicensed operators scatter and flee, with exchanges and project parties accelerating their move to Hong Kong, Dubai, and Malaysia.
A major reshuffle in the Asian regulatory landscape
Singapore's sharp turn stems from the reputational trauma of the 2022 FTX collapse, the sovereign fund Temasek's investment failures, and the then-Finance Minister Lawrence Wong (now Prime Minister) publicly reflecting on the situation, directly prompting Singapore to shift towards 'extreme caution' with strong regulation. The era of regulatory arbitrage has ended, and compliance has become the baseline for survival. Singapore's cliff-like exit warning signals to practitioners: the wild growth of Web3 has ended, and 'licensed compliance' is the ticket to the new paradise, regardless of whether the ultimate destination is Hong Kong, Dubai, or the next safe haven.
