From Safe Haven to Regulatory Frontline
Since mainland China began tightening its oversight of cryptocurrency trading and ICOs in 2017, and escalated its crackdown on mining and domestic trading platforms in 2021, many crypto projects and companies were forced to relocate overseas. As a fintech hub in Asia, Singapore quickly became a "safe haven" for the crypto industry, thanks to its clear legal framework, open market access, and relatively low regulatory friction. Numerous companies—ranging from exchanges to fund managers and infrastructure providers—moved their operations there after exiting mainland China.
In terms of regulation, Singapore introduced the Payment Services Act (PSA) in 2019, providing a clear compliance pathway for crypto asset-related businesses, covering digital payment token services, e-money issuance, cross-border remittance, and more.
However, with rising global concerns over crypto industry risks—and particularly after the late-2022 collapse of FTX, which inflicted both economic and reputational damage on Singapore's sovereign wealth fund Temasek Holdings—the country's stance toward crypto regulation began shifting quietly.
In the second half of 2024, the Monetary Authority of Singapore (MAS) released new rules requiring licensed platforms to fully segregate user assets and prohibiting token staking services for retail investors. Just last week, MAS took it further, officially ordering all local crypto companies without a Digital Token Service Provider (DTSP) license to cease offering digital token services to overseas customers by June 30, 2025.
Comply or Exit: No Grace Period, Harsh Penalties AheadMAS issued this directive under Section 137 of the Financial Services and Markets Act (FSM Act), with no transition period or grace arrangements. Companies wishing to continue overseas operations must either obtain a DTSP license or already hold relevant permits under other laws (e.g., the PSA, Securities and Futures Act, or Financial Advisers Act). Non-compliant entities face fines up to SGD 250,000 and/or up to three years' imprisonment.
MAS stated that this move aims to close regulatory loopholes and prevent companies from setting up “shell entities” in Singapore as a façade for offering crypto services abroad while avoiding local or international oversight. The policy aligns with broader global trends to strengthen anti-money laundering (AML) and counter-financing of terrorism (CFT) frameworks.
As Singapore Tightens Up, Hong Kong, Japan, and Dubai Rise as New Crypto MagnetsSingapore, Japan, and Hong Kong have long competed—often subtly—to be Asia’s crypto finance center. Meanwhile, Dubai has been actively positioning itself as a global crypto and blockchain-friendly environment, aiming to become a strategic hub connecting the Middle East, Europe, and Asia. Singapore’s latest regulatory “stick” has undoubtedly reshuffled the deck in this silent rivalry.
In Hong Kong, regulators began rolling out a Virtual Asset Trading Platform (VATP) licensing regime in 2023, allowing licensed platforms to serve retail investors under a supervised framework. With its slogan of “regulated innovation,” Hong Kong is gradually attracting Web3 teams from Southeast Asia—especially given its clarity in policy direction and institutional investor support.
After Singapore’s new regulation was announced, Hong Kong Legislative Council member Wu Jiezhuang even posted on social media platform X to woo affected firms:"If you’re currently operating in this industry in Singapore and considering relocating your headquarters and staff to Hong Kong, I’m happy to assist—welcome to build your future here!"
In Japan, the Financial Services Agency (FSA) has maintained a cautious but open stance on crypto. It has pushed forward stablecoin regulations and tax reforms. Recently, members of Japan’s ruling Liberal Democratic Party have called for a lower corporate tax on crypto assets to support domestic startups and attract global projects. Compared to Singapore’s no-leeway approach, Japan’s regulatory environment offers more transition flexibility and policy stability, making it appealing for projects seeking a predictable environment.
Dubai, meanwhile, continues to strengthen its status as a “crypto oasis.” The Virtual Assets Regulatory Authority (VARA) provides a flexible and forward-looking compliance framework, attracting exchanges, wallet providers, and DeFi protocols. Dubai welcomes international crypto firms to set up regional headquarters and is actively aligning with global standards like FATF, balancing regulatory integrity with market dynamism.
Strict Regulation Drives Consolidation: Singapore Enters Era of Concentrated ComplianceAccording to MAS, 24 companies—including COBO, ANTALPHA, CEFFU, and MATRIXPORT—are on the exemption list, while 33 companies such as BITGO, CIRCLE, COINBASE, GSR, HashKey, and OKX SG have already obtained DTSP licenses.
The new policy has undoubtedly intensified a market shakeout. Industry insiders believe this will drive short-term consolidation, empowering firms with strong resources and compliance capabilities to gain a competitive edge.
The high compliance bar means only well-capitalized, well-managed large firms can successfully obtain licenses. Unlike small or early-stage startups, these major players are more capable of handling the cost and complexity of regulation—and will thus continue expanding.
Moreover, licensed firms enjoy brand credibility and international reputation benefits, critical for attracting investment and pursuing cross-border opportunities. As regulation becomes the industry baseline, competition will increasingly shift toward service quality, tech innovation, and operational compliance.
Still, even with a clear “stronger-get-stronger” trend, the underlying purpose of regulation is to promote healthy industry development and risk mitigation. In the long run, the post-shakeup market will be more mature, with licensed firms forming a more competitive and sustainable ecosystem.
When Policy Hits Home: Crypto Employees Face Silent StrugglesWhen regulatory winds blow, most people hear only the rustle of leaves. But for individuals, that wind can turn their lives upside down.
Li Yue (pseudonym), who has worked in the tech department of a Top 10 crypto exchange in Singapore for nearly three years, had been preparing to apply for Permanent Residency (PR). However, due to the new rules, his employer might need to scale down or exit Singapore altogether—losing its local license would mean his Employment Pass (EP) could not be renewed, and his PR process would be suspended.
According to the Immigration and Checkpoints Authority (ICA), PR approval considers an applicant’s job stability, salary, length of stay, and contribution to society. If the employer exits suddenly, applicants risk invalid documents and reassessment of eligibility.
“If the company pulls out, I might have to leave. These three years would have been for nothing. The news talks about ‘strategic realignment,’ ‘resource optimization,’ or ‘compliance with regulations’—but behind every word, someone’s packing their bags, postponing plans, and rethinking their life,” he said.
Reportedly, exchanges without DTSP licenses but with Singapore offices have yet to announce clear plans for employee arrangements. With no internal guidance or safeguards in place, many employees like Li Yue remain in the dark, facing an uncertain and anxiety-filled future.
ConclusionThis new policy is not a sudden shift but the culmination of MAS’s years-long regulatory evolution. For unlicensed local firms, this is a “final audit”, marking the start of a more compliant, institutionalized crypto market in Singapore. It sends a clear message: while innovation is welcome, the regulatory framework for global crypto operations will tighten, and regulatory arbitrage will no longer be tolerated.
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