Original Title: "From the Ideal State to the ‘Exile Land’: The Singapore Transformation Through the Eyes of 5 Web3 Practitioners"
Original Author: Louis, ChainCatcher
June 30, 2025, is a red line marked on the calendar of every Web3 practitioner in Singapore. From this date onwards, according to Section 137 of Singapore's Financial Services and Markets Act (FSMA), individuals or companies providing digital token-related services must obtain a Digital Token Service Provider (DTSP) license if they have a business presence in Singapore, regardless of whether their clients are located in Singapore or abroad. Failure to do so will result in criminal liability.
In a regulatory response document published by the Monetary Authority of Singapore (MAS) on May 30, it was explicitly stated: entities operating without a license by that date must immediately cease all overseas business activities. The status of "license application in progress" will not be recognized as a legal justification. This phrasing has been interpreted by many as "the strictest crypto regulation in history."
In response, ChainCatcher consulted professional legal experts to highlight key points in the FSMA document that may have been overlooked. Additionally, we interviewed 5 practitioners based in Singapore to capture the authentic reality of Web3 workers on the ground and gain insight into their perspectives on Singapore's evolving regulatory landscape.
Note: In this article, MAS refers to Singapore's financial regulatory authority; PSA, launched in 2019, governs crypto payment services; FSMA, introduced in 2022, is a more comprehensive regulatory framework that includes oversight of token-related services. DTSP (Digital Token Service Provider) refers to individuals or companies providing token trading, custody, transfer, and related services and is the focus of FSMA's regulatory efforts.
During an interview with Guo Yatao, a director at Beijing Strategy Law Firm's Digital Economy Committee, several key takeaways from the legislation emerged, which merit reader attention:
Many in the industry mistakenly believe that FSMA is merely a supplement to plug the gaps left by the earlier Payment Services Act (PSA) in regulating Singaporean entities servicing overseas clients. However, Attorney Guo emphasized: "FSMA is a framework law for comprehensive oversight, with multiple sections applying to entities providing financial services within Singapore." This means that whether the business targets domestic or overseas markets, as long as there is a business presence in Singapore or if the company is registered there, it must comply with FSMA. This *penetrative regulation* methodology signifies the formal onset of MAS's comprehensive oversight of local Web3 practitioners.
The PSA primarily focuses on the compliance of businesses and institutions, whereas the FSMA introduces a new regulatory mechanism targeting individuals. Lawyer Guo pointed out: “With FSMA, MAS can bypass the traditional institutional licensing framework and directly intervene with and isolate high-risk individuals within the financial market, achieving a more granular individual-level regulation.” This means that even freelance professionals, remote developers, consultants, or KOLs operating within Singapore's jurisdiction may be deemed regulatory subjects by MAS. “The framework requires a thorough understanding of FSMA and relevant professional experience,” significantly raising the entry barrier for individuals in the industry.
Even holding a PSA license does not guarantee automatic compliance. Lawyer Guo noted: “Currently, most approved crypto business licenses in the market are issued under PSA. FSMA significantly raises the compliance threshold. MAS has expressly stated that businesses with PSA licenses still need to submit supplemental materials to meet FSMA requirements.” Applying for a DTSP license not only requires an initial capital of SGD 250,000 and a resident compliance officer but also necessitates establishing an independent audit mechanism, submitting periodic compliance reports, and implementing anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks and supporting management systems.
From broader coverage to more detailed requirements, and higher thresholds, stricter regulations have indeed brought significant pressure and anxiety to Web3 practitioners. However, paper policies are one thing; whether a nation's policies are truly welcoming to Web3 depends on how they are practically implemented. In interviews conducted by ChainCatcher, we heard a wide range of perspectives—from startup teams reluctantly moving out, to individual workers choosing to wait and see, to veteran settlers still optimistic about Singapore's long-term potential. Their stories collectively paint a realistic picture of the policy implementation landscape:
We have indeed been affected. In the current crypto landscape, almost all meaningful products eventually cannot avoid the core aspect of trading. And once trading is involved, it's bound to touch the DTSP regulatory red line. Regulation is supposed to serve companies with mature business models and clear structures, but for small teams like ours, spending a significant amount of time and resources navigating regulatory hurdles is an almost unbearable burden.
Clearly, Singapore is no longer suitable for early-stage projects to thrive. Perhaps Singapore never intended to be a cradle for startups—they only aspire to be the headquarters for mature companies. We aren't even certain what our business model will look like next month, and at this point, we can't rule out the possibility of relocating out of Singapore entirely in the future. That said, I'll remain optimistic and adapt to the changes because “small businesses always find ways to survive.”
```htmlI feel that the Web3 industry has always been somewhat marginalized, whether it was being driven out of China before or now being sidelined as a small business in Singapore. But objectively speaking, as someone who has worked in the OTC business in Singapore for many years, I have always felt that pragmatism is the hallmark of Singapore's regulatory approach. To put it bluntly, the Singapore government is like a "pragmatic player": whoever can bring tangible value gets to stay; if you only bring bubbles, they'll see you off. Those who have received licenses can continue operating; others will have to pack up and leave—this is an unmistakable signal.
From my perspective, however, this round of regulation doesn’t feel like a heavy-handed crackdown. It’s more like— "thunderous roars with light rain," mainly an act of signaling. Businesses that truly need licenses have already applied for them. For those who contribute to the government or have real competence, this new regulatory wave is unlikely to make them anxious at all.
As for why the regulatory environment suddenly tightened, I think it has to do with the gray-market activities and shell companies within the crypto community in Southeast Asia. MAS's objective with this round of regulations is to sound an alarm for some of the more reckless KOLs (Key Opinion Leaders) and fragmented groups. They might not truly be able to strike them all down at once, but they hope to use the legal framework to curb their excesses.
From what I know, some KOLs and employees of trading platforms have recently chosen to pause their businesses, take a vacation, or adopt a wait-and-see approach. Everyone is waiting for a more definitive signal.
I want to emphasize one word: pragmatism. This has always been my core understanding of Singapore's governance style. Singapore's efficiency and adherence to rules are essentially aimed at ensuring economic benefits and securing a stable position in the international political and financial landscape. The tightening of regulatory policies this time stems from certain issues in the Web3 space that need to be addressed. The government must intervene to ensure a healthy ecosystem.
My project hasn't been directly affected so far, but I can see that these policy adjustments have indeed dealt a significant blow to some trading platforms that have yet to secure licenses, as well as their collaborating project teams and ecosystem partners. Specifically, KOLs who play advisory roles in the Web3 space have been feeling the pressure of these regulations, which have created a noticeable deterrent effect.
Recently, I’ve also observed that more freelancers and remote workers are starting to prefer working from home and are avoiding openly discussing Web3-related topics in public settings. Everyone seems to be trying to reduce risk and avoid unnecessary trouble.
```In fact, Singapore's regulatory policies in the Web3 space over the past few years have not undergone drastic shifts. Instead, there’s been more clarification and refinement of existing frameworks. According to the latest clarifications from MAS (Monetary Authority of Singapore) and reports by "Lianhe Zaobao," this round of regulation primarily targets Digital Payment Tokens (DPTs) and tokens with capital market attributes. However, the commonly mentioned Utility Tokens and Governance Tokens are not currently at the core of regulatory efforts.
For most startups, Singapore remains an environment with clear regulations, well-defined paths, and abundant resources. MAS not only maintains a high level of transparency but also provides an open consultation mechanism. For companies seeking to assess their compliance status, the process isn’t too challenging. Spending just a few thousand Singapore dollars can secure legal opinions, making the costs quite reasonable.
From a longer-term perspective, Web3 remains a fundamental part of Singapore's national strategy. Beyond clear policy frameworks, the government supports ecosystem development through funding, talent development, and industrial alliances. Moreover, Singapore’s Ministry of Education strongly encourages universities to offer blockchain-related courses. Personally, I firmly believe that on a global scale, if one were to look for a place that truly strikes a balance between regulatory sensibility and industry vitality, Singapore remains the most inclusive and trustworthy choice for entrepreneurs.
For us, the current regulatory changes haven’t caused any significant impact. We’re an AI startup and still plan to continue building in Singapore. I believe this round of regulation mainly targets enterprises and projects with strong financial attributes, while the actual impact on small teams like ours is relatively limited. If even the big players in the crypto industry are largely unaffected, there’s little reason for small teams to worry.
Speaking of Singapore’s entrepreneurial environment, I’ve always felt it’s an exceptional place for small teams, and even for individuals, to start a business. Especially for overseas Chinese like me, Singapore offers natural advantages in language and culture, reducing communication costs and accelerating operational groundwork. While some might perceive Singapore as relatively conservative in certain policies, I view it as a fair, open, and rational place to approach innovation. Within the bounds of maintaining order, Singapore is indeed willing to give innovators a chance.
This round of regulatory tightening is essentially a self-calibration exercise by Singapore as an international financial hub, rather than an expulsion of the Web3 industry. Web3 practitioners are not simply divided into those fleeing and those staying. Rather, they are actively reevaluating and reconsidering: Should they stay and embrace stricter regulations in exchange for long-term policy certainty, or shift to seemingly friendlier markets that come with greater uncertainty?
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