Original Title: "When Singapore Starts Chasing Crypto Players Away"

Original Source: DeepTech TechFlow

The once Web3 paradise Singapore has started to drive people away. On May 30, the Monetary Authority of Singapore (MAS) officially released the "Digital Token Service Provider (DTSP)" Final Policy Guide, with a very strong stance: all cryptocurrency service providers registered or operating in Singapore must cease providing services to overseas customers by June 30, 2025, if they have not obtained a DTSP license.

This regulation has no transition period, and violators will be punished by law. Companies found to be in violation of the law may face fines of up to SGD 250,000 (USD 200,000) and up to three years in prison. This policy was like a bolt from the blue, causing many Singaporean cryptocurrency practitioners to shudder.

As the Web3 hub of Asia, Singapore has always played the role of a "regulatory arbitrage" perfect spot. Singapore has previously implemented a "light touch" regulatory strategy, allowing companies registered in Singapore to freely provide services to overseas customers, with only stricter regulatory requirements for businesses targeting the local market.

Especially when China implemented a comprehensive ban and the U.S. SEC increased enforcement efforts, tightening regulations in major markets, Singapore timely played the role of a safe haven, providing a secure base for many cryptocurrency exchanges, funds, and projects, leading to wave after wave of migration of cryptocurrency companies. Even Singapore's sovereign wealth fund Temasek has invested in cryptocurrency companies such as FTX and Immutable, consolidating Singapore's position as the Asian crypto hub.

However, this clear regulatory policy has gradually closed the gap of "regulatory arbitrage." According to the DTSP Final Regulatory Response document released by MAS in Singapore, some of the strictest key points are:

· Comprehensive Oversight of Cross-Border Business: Regardless of whether the service targets Singapore local or overseas customers, as long as digital token-related business is conducted within Singapore, a DTSP license is required, directly cutting off the previous "registered in Singapore but only serving overseas customers" regulatory loophole.

· Extensive Definition of Place of Business: MAS defines "place of business" as "any place in Singapore used by a licensee to conduct business," including even movable booths. This definition covers almost all possible business locations, regardless of size.

· Dual Coverage of Individuals and Institutions: The regulatory scope covers individuals or partnerships operating in Singapore as well as Singaporean companies providing digital token services overseas, achieving full coverage of the subjects.

Furthermore, while MAS has stated that overseas company employees working from home may be accepted, the definition of "employee" is vague, and whether project founders or shareholders are considered employees is entirely at MAS's discretion.

Why Did Singapore MAS Suddenly Strike Hard? This is not a sudden policy attack by the Monetary Authority of Singapore (MAS) on cryptocurrency companies. As early as 2022, MAS introduced the "Payment Services and Market Act," Part 9 of which covers cryptocurrency regulation. Subsequently, MAS conducted multiple public consultations and issued consultation papers. The document on May 30th is a response to the consultation, providing detailed insights into specific regulatory approaches, regulations, notices, and the DTSP Licensing Guide.

According to the consultation paper, MAS's core consideration is that "some cryptocurrency companies 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/terrorism financing (ML/TF) risks... The main risk DTSPs pose to Singapore would be reputational risk, i.e., potential damage to Singapore's reputation if they are involved in or abused for illegal purposes."

Perhaps everything goes back to 2022 when Temasek-backed cryptocurrency exchange FTX and local crypto fund Three Arrows Capital faced a crisis, severely damaging Singapore's financial reputation. Then-Finance Minister Heng Swee Keat (now Prime Minister) publicly stated that "this investment caused reputational damage, and Temasek subsequently imposed pay cuts on the investment team and senior management."

Under the latest regulations, which cryptocurrency companies will be affected? According to the consultation paper, all entities involved in cryptocurrency asset trading must be licensed, including cryptocurrency exchanges, cryptocurrency custody, cryptocurrency transfers, cryptocurrency issuance... As the June 30, 2025 deadline approaches, panic from various social media circles envelops the hearts of cryptocurrency practitioners in Singapore, but the prevailing sentiment is one of confusion.

"I was unaware of the relevant policies before. When it exploded in my social circle, there are currently conflicting opinions, so I can only wait and see. If necessary, I'll just leave Singapore and go to neighboring Malaysia," said Adam, a project participant in the cryptocurrency sector. Kevin, an employee of a cryptocurrency exchange platform, is deeply troubled. "Our company had already planned to relocate the office to Hong Kong entirely, but I do not know the specific timetable. Having been a long-term resident of Singapore for 2 years, I was preparing to apply for Singapore Permanent Residency (PR). Faced with this situation, I feel regret and reluctance."

Previously, Hong Kong Legislative Council Member Wu Chi-wai posted on social media to attract Singaporean crypto industry participants to relocate to Hong Kong. He stated: "Singapore recently released the 'Digital Token Service Provider Licensing Guide,' introducing new policies for companies, institutions, and individuals involved in virtual assets. Since Hong Kong's release of the Virtual Asset Declaration in 2022, it has actively welcomed the industry to develop in Hong Kong. According to informal statistics, over a thousand Web3 companies have landed in Hong Kong. If you are currently engaged in the relevant industry in Singapore and are interested in relocating your headquarters and personnel to Hong Kong, I am willing to provide assistance. Welcome to develop in Hong Kong!"

Crypto custody platform Cobo's COO, former Legal Head of PAG Tai Man Group Lily, believes that the policy has been overly magnified in terms of panic. The policy maintains MAS's consistent regulatory style, primarily affecting Singapore's unlicensed exchange platforms' frontend and operational teams. It will not affect Cobo, which has already been exempted, or licensed companies, nor will it affect institutions whose business scope is outside the licensed regulatory scope.

According to information on the Singapore MAS website, COBO, ANTALPHA, CEFFU, MATRIXPORT, and 20 other companies are on the exemption list, while BITGO, CIRCLE, COINBASE, GSR, Hashkey, OKX SG, and 27 other companies have obtained the DTSP license.

For these licensed and exempt companies, the new policy has actually created a more level playing field, enhanced the reputation 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 locations like Hong Kong, Dubai, Malaysia, etc.

Adam believes that the departure of crypto industry participants from Singapore is a major trend, and this policy is more about accelerating this process. "The cost of living in Singapore is high, boring, and, more importantly, there are too few money-making opportunities now. If you want to live, go to Japan; if you want to make money, go to Dubai." Singapore was once known as the "Jerusalem of Crypto Jews," but now its doors are closing, forcing Crypto Jews to wander and continue their journey.

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