When Singapore Began Driving Out Crypto Enthusiasts
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When Singapore Began Driving Out Crypto Enthusiasts
Encrypted Jews, continue wandering.
Navigating Web3 tides with focused insightsWritten by: TechFlow
Singapore, once a Web3 paradise, is now pushing people out.
On May 30, the Monetary Authority of Singapore (MAS) officially released its final policy guidelines for "Digital Token Service Providers (DTSP)," with an uncompromising tone:
All crypto service providers registered or operating in Singapore must cease offering services to overseas clients by June 30, 2025, if they have not obtained a DTSP license.
The rule allows no transition period. Violators will face legal penalties, including fines up to 250,000 Singapore dollars (200,000 USD) and imprisonment of up to three years for companies found in breach of the law.
This regulation has struck like a bolt from the blue, sending shockwaves through Singapore’s crypto industry.
As Asia’s Web3 hub, Singapore has long served as the perfect venue for “regulatory arbitrage.”
In the past, Singapore adopted a dual-track regulatory approach—allowing companies registered locally to freely serve overseas clients, while imposing stricter rules only on businesses targeting the domestic market.
Especially when China imposed a blanket ban and the U.S. SEC intensified enforcement actions, tightening regulations in major markets, Singapore timely positioned itself as a safe haven, providing secure ground for numerous crypto exchanges, funds, and projects. This triggered successive waves of migration by crypto firms. Even Temasek, Singapore’s sovereign wealth fund, invested in crypto entities such as FTX and Immutable, reinforcing Singapore’s status as Asia’s crypto center.
However, this latest regulatory move is gradually closing the loophole for “regulatory arbitrage.”
According to MAS’s final response document on DTSP regulation, the most stringent aspects include:
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Full oversight of cross-border operations: Any digital token-related business conducted within Singapore must obtain a DTSP license, regardless of whether clients are local or overseas. This directly cuts off the previous model of “registering in Singapore but serving only international clients,” eliminating regulatory arbitrage.
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Extremely broad definition of “place of business”: MAS defines a “place of business” as “any location in Singapore used by the licensee to conduct business,” including even mobile booths. This definition covers virtually all possible operational sites, regardless of size.
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Coverage of both individuals and institutions: Regulated entities include not only individuals or partnerships operating from physical locations in Singapore, but also Singapore-registered companies conducting digital token services abroad—achieving comprehensive coverage of all actors.
Additionally, although MAS stated that remote work by overseas employees at home is acceptable, the term “employee” remains vaguely defined. Whether founders or shareholders qualify as employees is entirely at the discretion of MAS.
Why is MAS suddenly cracking down so hard?
This is not a sudden policy attack on crypto firms. As early as 2022, MAS introduced the Financial Services and Markets Act, with Part IX specifically addressing crypto regulation. Since then, it has conducted multiple public consultations and issued draft guidelines. The May 30 document responds to those consultations and details specific regulatory methods, rules, notices, and DTSP licensing guidance.
According to the consultation paper, MAS’s core concern is “some cryptocurrency firms may damage Singapore’s reputation.”
The document states: “Given the internet-based and cross-border nature of digital token services, Digital Token Service Providers (DTSPs) are more susceptible to money laundering/terrorist financing (ML/TF) risks… The primary risk DTSPs pose to Singapore would be reputational risk—that is, the potential harm to Singapore’s reputation if they are involved in or misused for illicit purposes.”
The root of this shift may trace back to 2022, when FTX—the crypto exchange backed by Temasek—and local crypto fund Three Arrows Capital collapsed, severely damaging Singapore’s financial reputation. Then-Finance Minister Lawrence Wong (now Prime Minister) publicly admitted the investment had caused reputational harm, prompting Temasek to cut salaries for its investment team and senior executives.
Which crypto firms will be affected under the new regulations?
According to the consultation paper, any entity involved in crypto asset trading must be licensed, including crypto exchanges, custodians, transfer services, and token issuers.
With the June 30, 2025 deadline approaching, anxiety looms over Singapore’s crypto professionals via social media and private networks—but more prevalent than fear is confusion.
“I didn’t even know about these policies until my social feed suddenly exploded. Opinions are divided now. For now, we can only wait and see. If needed, we’ll just leave Singapore and head to neighboring Malaysia,” said Adam (a pseudonym), a project founder.
Kevin, an employee at a crypto exchange, feels deeply conflicted. His company has already planned to relocate its entire office to Hong Kong, but he doesn’t know the timeline. Having lived in Singapore for two years and preparing to apply for permanent residency (PR), he now faces disappointment and regret.
Prior to this, Hong Kong lawmaker Wilson Ng posted on social media inviting Singapore-based crypto professionals to move to Hong Kong, saying: “Singapore recently released the *Licensing Guidelines for Digital Token Service Providers*, introducing new policies for companies, institutions, and individuals in the virtual asset sector. Since issuing its Virtual Asset Declaration in 2022, Hong Kong has actively welcomed the industry’s development. According to informal statistics, over a thousand Web3 companies have already set up in Hong Kong. If you’re currently working in Singapore and considering relocating your headquarters and team to Hong Kong, I’m happy to assist. Welcome to develop in Hong Kong!”
Lily, COO of crypto custody platform Cobo and former General Counsel at PAG (Pacific Alliance Group), believes the panic around the policy has been overblown. She notes that MAS maintains its consistent regulatory style. The main impact is on unlicensed exchanges’ front offices and substantive operational teams in Singapore. It does not affect exempted firms like Cobo, nor licensed entities, or institutions whose activities fall outside the scope of regulated services.
According to official MAS website data, 24 companies—including COBO, ANTALPHA, CEFFU, and MATRIXPORT—are on the exemption list, while 33—including BITGO, CIRCLE, COINBASE, GSR, Hashkey, and OKX SG—have already obtained DTSP licenses.
For these licensed and exempted firms, the new policy actually creates a fairer competitive landscape, enhances the reputational value of licensed institutions, and lays the foundation for global expansion.
Conversely, as the era of regulatory arbitrage ends, some offshore crypto firms based in Singapore have begun relocating to Hong Kong, Dubai, Malaysia, and elsewhere.
Adam believes that crypto professionals leaving Singapore is an inevitable trend—the policy merely accelerates the process.
“Singapore is expensive and boring. More importantly, there are too few opportunities to make money. If you want a good life, go to Japan; if you want to earn, go to Dubai.”
Once hailed as the “Jerusalem for Crypto Jews,” Singapore is now closing its gates. The crypto Jews must once again wander the earth, searching for new pastures.
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