From Utopia to "Exile Land": Singapore's Transformation Through the Eyes of 5 Web3 Practitioners
TechFlow Selected TechFlow Selected
From Utopia to "Exile Land": Singapore's Transformation Through the Eyes of 5 Web3 Practitioners
If this place doesn't want me, there are other places that will.
Navigating Web3 tides with focused insightsInterview and compilation: Louis, ChainCatcher
June 30, 2025, is a red line marked on every Web3 practitioner’s calendar in Singapore.
From this date onward, under Section 137 of Singapore's Financial Services and Markets Act (FSMA), any individual or company offering digital token-related services that maintains a place of business in Singapore must obtain a Digital Token Service Provider (DTSP) license—regardless of whether their clients are based in Singapore. Failure to comply will result in criminal liability.
In its regulatory response document released on May 30, the Monetary Authority of Singapore (MAS) made it clear: unlicensed entities must immediately cease all overseas operations by the deadline; being “in the process of applying” will not be accepted as legal grounds for continued operation. This wording has been interpreted by many as “the strictest crypto regulation in history.”
ChainCatcher consulted legal experts to uncover overlooked aspects of the FSMA, and interviewed five Web3 professionals based in Singapore to paint an accurate picture of how practitioners are experiencing these regulatory shifts.
Note: In this article, MAS refers to Singapore’s financial regulator; PSA refers to the Payment Services Act introduced in 2019, which initially regulated crypto payment services; FSMA is the updated 2022 legislation with broader scope, now including oversight of token-related services; DTSP refers to individuals or companies providing token trading, custody, or transfer services—the primary targets of FSMA regulation.
1. Overlooked Core Provisions of the Law
During our interview with Guo Yatao, Director of the Digital Economy Committee at Beijing CeLue Law Firm, we identified several critical but often overlooked points:
1. FSMA is not a patch for offshore loopholes—it’s a comprehensive upgrade covering both domestic and international operations
Many in the industry mistakenly believe FSMA was created solely to close gaps left by the original Payment Services Act (PSA), particularly regarding Singapore-based firms serving overseas clients. However, Lawyer Guo emphasized: “FSMA is an overarching regulatory framework whose provisions apply broadly to any entity providing financial services within Singapore.” This means that regardless of client location, any individual or company operating from Singapore—or registered there—must comply with FSMA. This principle of **penetration-style regulation** marks the formal beginning of comprehensive oversight over local Web3 actors by MAS.
2. Regulatory focus shifts from 'institutional licensing' to 'individual scrutiny'
While the PSA primarily targeted institutional compliance, FSMA introduces new mechanisms for regulating individuals. As Lawyer Guo noted: “FSMA enables MAS to bypass traditional institutional licensing frameworks and directly intervene against high-risk personnel in the financial market—achieving true person-level penetration.” This implies that even non-management freelancers, remote developers, consultants, or KOLs could fall under MAS supervision if they operate in Singapore while engaging in relevant activities. The requirement to “fully understand the FSMA framework and possess relevant professional experience” significantly raises the bar for individual participation.
3. FSMA sets significantly higher thresholds than PSA, with far more rigorous compliance demands
Holding a PSA license does not guarantee automatic eligibility under FSMA. According to Lawyer Guo: “Most currently approved crypto licenses were issued under the PSA framework. FSMA raises the compliance bar substantially. MAS has clearly stated that even PSA-licensed firms must submit supplementary materials to meet FSMA standards.” Applying for a DTSP license now requires not only S$250,000 in initial capital and a resident compliance officer, but also an independent audit mechanism, regular submission of compliance reports, and full anti-money laundering (AML) and counter-terrorism financing (CFT) procedures and management systems.
2. What Do Web3 Practitioners in Singapore Think?
With wider coverage, stricter requirements, and higher barriers, the tightening regulations have indeed caused stress and anxiety among Web3 practitioners. Yet while rules exist on paper, the real test lies in how businesses and individuals on the ground perceive them. Through interviews conducted by ChainCatcher, we heard diverse perspectives—from startups preparing to leave, to individuals choosing to wait and see, to long-term residents still confident in Singapore’s strategic vision. Their stories collectively reveal the actual landscape shaped by policy implementation:
1. Chari, founder of a tokenized project: Small teams find ways to survive—water always finds a path
We’ve definitely been affected. In today’s crypto ecosystem, almost every meaningful product eventually revolves around trading. And once you touch trading, you hit the DTSP regulatory red line. Regulation should support mature, well-structured businesses—but for small teams like ours, dedicating massive time and resources to regulatory compliance is nearly an unbearable burden.
It’s clear that Singapore is no longer suitable for early-stage projects. Perhaps Singapore never intended to become a cradle for startups—it seems they only want headquarters of established enterprises. We don’t even know what our business model will look like next month, and we can’t rule out completely leaving Singapore in the future. Still, I remain optimistic. After all, “small businesses always find their own way to survive.”
2. Anonymous veteran OTC trader (“Geek Boy”): Singapore is a ‘pragmatic player’—whoever brings value gets to stay
I’ve felt a sense of exclusion in Web3—for example, when driven out of China before, or now facing marginalization as a small operator in Singapore. Objectively speaking, though, having worked in OTC in Singapore for years, I’ve always seen pragmatism as the core of its regulation. To put it bluntly, the Singapore government acts like a ‘pragmatic player’: whoever brings real value stays; whoever brings only bubbles gets politely shown the door. Those who already have licenses can continue—they’re sending a very clear signal.
That said, from my perspective, this round of regulation isn’t as harsh as it sounds—it’s more like “much ado about nothing,” mainly meant to send a warning shot. Companies that truly need licenses have already applied. Founders who contribute to the economy or genuinely have capabilities aren’t really worried about these new rules.
As for why regulation tightened now, I think it’s tied to gray-market activities and shell companies linked to crypto in Southeast Asia. MAS wants to use this legal push to warn less disciplined KOLs and loosely organized groups. They may not be able to eliminate everyone overnight, but they hope the legal framework forces some behavioral restraint.
From what I’ve seen, several KOLs and exchange professionals have already chosen to pause operations—go on vacation, or just watch and wait. Everyone’s waiting for a clearer signal.
3. John, long-time practitioner in Web3 AI in Singapore: Look beyond surface—every effect has a cause
I’d emphasize one word: pragmatism. That’s my fundamental understanding of Singapore’s governance style. Its efficiency and adherence to rules ultimately serve economic interests and aim to secure a stable position amid global political and financial competition. The recent regulatory tightening stems from real issues emerging in Web3 that require intervention to ensure healthy ecosystem development.
My project hasn’t been directly impacted, but I can see that exchanges without proper authorization—and their partner projects and ecosystem collaborators—are facing significant disruption. Especially KOLs playing financial advisory roles in Web3 circles—they’re feeling the pressure now, and it’s having a deterrent effect.
Recently, I’ve also noticed more freelancers and remote workers opting to work from home and avoiding public discussions about Web3 topics. Everyone is trying to minimize risk and avoid unnecessary trouble.
4. Neil, founder of Reddio and nearly 20-year resident of Singapore: Nothing has fundamentally changed—Web3 remains part of Singapore’s national strategy
Singapore’s Web3 regulatory stance hasn’t undergone drastic changes in recent years—it’s mostly about clarifying and refining existing frameworks. According to MAS’s latest clarifications and reports from Lianhe Zaobao, the current regulatory focus is on Digital Payment Tokens (DPTs) and tokens with capital market features. Utility tokens and governance tokens—the kinds most commonly used by startups—are not currently central to this regulation.
For most early-stage projects, Singapore remains a well-defined, transparent, and resource-rich environment. MAS maintains high transparency and offers open consultation channels. Assessing your compliance status isn’t difficult—you can get solid legal advice for a few thousand SGD, which is reasonable.
In the long run, Web3 remains part of Singapore’s national strategy. Beyond clear policies, the government supports the ecosystem through funding, talent development, and industry alliances. Even the Ministry of Education encourages universities to offer blockchain courses. Personally, I still believe that globally, if you’re looking for a place that balances regulatory rationality with industrial dynamism, Singapore remains the most inclusive and trustworthy choice for entrepreneurs.
5. Chess, founder of GM Agents: It’s a reshuffling phase, but mainly targeting finance-heavy players, not everyone
For us, the current regulatory changes haven’t caused noticeable impact. We’re an AI startup, and we still plan to stay and build in Singapore. I see this regulatory wave as primarily aimed at projects with strong financial characteristics. For smaller teams like ours, the actual impact is relatively limited. If major crypto firms aren’t panicking yet, smaller teams shouldn’t worry too much.
On Singapore’s entrepreneurial environment, I’ve always found it ideal for small teams—even solo founders. Especially for overseas Chinese like me, Singapore offers natural linguistic and cultural affinity, lower communication barriers, and faster setup. Some may view Singapore as conservative in certain areas, but compared to many other regions, it remains fair, open-minded, and rational toward innovation. Within a structured system, Singapore genuinely gives innovators a chance.
Conclusion
This regulatory tightening is essentially Singapore recalibrating itself as a global financial center—not a rejection of Web3. Practitioners aren’t simply splitting into those fleeing and those staying. Instead, they’re reevaluating: whether to remain and accept stricter oversight in exchange for long-term policy certainty, or to move to seemingly friendlier markets filled with greater uncertainty.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
ChainCatcher 链捕手
