In Singapore, the era of regulatory arbitrage is officially over, and the era of big fish eating small fish has arrived.
Written by: Spinach Spinach
The Monetary Authority of Singapore (MAS) released a response document on the new regulations for Digital Token Service Providers (DTSP) on May 30, 2025, and many are still unaware that this will actually impact the landscape of the entire Web3 industry in Asia.
The new regulations will officially take effect on June 30, 2025, and MAS has clearly stated that there will be no grace period! A large-scale "Singapore Web3 exodus" may have quietly begun.
"We will be extremely cautious." When the MAS expresses this attitude unabashedly in this stern consultation document, Singapore, once hailed by global Web3 practitioners as the "Asian crypto-friendly paradise," is bidding farewell to the past in a surprising manner—not through gradual policy adjustments, but through an almost "cliff-like" tightening of regulations.
For those project parties and institutions that are still observing, this may no longer be a question of "whether to leave," but rather a choice of "when to leave" and "where to go."
Former Glory: The Golden Era of Regulatory Arbitrage
Do you remember Singapore in 2021? When China fully banned cryptocurrency trading and the U.S. SEC was waving the regulatory stick, this small island nation welcomed Web3 entrepreneurs with open arms. Three Arrows Capital, Alameda Research, FTX Asia headquarters... one impressive name after another chose to settle here, not only because of the 0% capital gains tax but also due to the "embracing innovation" stance shown by MAS at that time.
At that time, Singapore was known as the "regulatory arbitrage paradise" of the Web3 industry. By registering a company here, one could legally and compliantly provide digital asset services to global users outside of Singapore while enjoying the reputation of being a financial hub. This business model of "being in Singapore while focusing on the global market" once attracted countless Web3 practitioners.
And now, the new DTSP regulations in Singapore mean that Singapore has completely closed the door to regulatory-friendly practices, and its attitude can be summarized in one sentence: to expel all unlicensed individuals from the Web3 industry out of Singapore.
What is DTSP? A definition that makes one "think deeply and feel scared".
DTSP stands for Digital Token Service Provider. According to the definition in Section 137 of the FSM Act and the content of Document 3.10, DTSP includes two types of entities:
Individuals or partnerships operating at a place of business in Singapore;
Singapore companies providing digital token services outside of Singapore (regardless of whether the company originates from Singapore or elsewhere)
This definition seems simple, but it actually hides dangers.
First of all, what is the definition of "place of business" in Singapore? The definition of "place of business" given by MAS is "any location in Singapore used by a licensee to conduct business (including a stall that can move from one location to another)."
Note several key points in this definition:
"Any location": No restriction that it must be a formal business premises.
"Including stalls": Even mobile stalls are included, showing the broad scope of regulation.
"Used for conducting business": The key is whether business activities are carried out at that location.
To put it simply, as long as you are not licensed in Singapore, there is a risk of breaking the law by conducting any business involving digital assets in any venue, whether you are a local company in Singapore or an overseas company, whether you are targeting local or overseas customers in Singapore.
So will working from home be illegal?
In response to this issue, Baker McKenzie law firm submitted feedback to MAS in the document.
Baker McKenzie law firm specifically sought clarification from MAS regarding this issue:
"Given the prevalence of remote work, is it the intention of MAS's policy to cover individuals employed by overseas entities but working from home or residential premises in Singapore?"
The concerns of the law firm are very real. They listed several possible scenarios that could lead to pitfalls:
Individuals providing DT services for overseas companies from home (possibly of a consulting nature)
Employees or directors of overseas companies working in Singapore under a remote work arrangement.
But at the same time, the law firm is also trying to provide some "amulets" for those working from home:
"Based on the drafting of current legislation, it can be argued that households or residential places should not be included, as households or residential places are generally not understood as locations where the licensee conducts business."
However, MAS poured a bucket of cold water on this issue:
"Pursuant to section 137(1) of the FSMA, a DTSP licence is required for all individuals who are engaged in the business of providing digital token services outside Singapore on their premises in Singapore, unless the individual falls under section of the FSMA A category of persons specified in 137(5). In this regard, if an individual is located in Singapore and is engaged in the business of providing digital token services to persons outside Singapore (i.e. individuals and non-individuals), the individual will need to apply for a licence under section 137(1) of the Financial Services and Markets Act. However, if an individual is an employee of a foreign-incorporated company that provides digital token services outside of Singapore, the work performed by the individual as part of his or her employment with a foreign-registered company will not in itself trigger the licensing requirements under section 137(1) of the FSMA."
and
"However, if these individuals work in shared office spaces or in the offices of affiliated companies overseas, they are clearly more likely to be included in the scope."
!
In summary, the new regulations are:
Without a license, neither individuals nor companies are allowed to conduct business targeting local or overseas clients in any business premises in Singapore.
If you are an overseas employee, working from home is acceptable.
But there are also many vague areas in the new regulations:
The definition of an employee in MAS is very vague, is the project founder an employee, and is holding shares an employee? It's all up to MAS
If you are a BD or salesperson of an overseas company, and you go to someone else's shared office to talk about business, is it considered to be doing business in the business place? MAS has the final say
Definition of fuzzy digital token services, will KOL also be affected?
MAS's definition of digital token services is staggeringly broad, covering almost all relevant token types and services. And even the publication of research reports is included?
According to the provisions of Item (j) of Schedule 1 of the FSM Act, the regulatory scope includes:
"Any services related to a sale or offer of Digital Tokens, including (1) providing advice related to Digital Tokens, either directly or through publications, articles, or any other form (electronic, printed or otherwise), or (2) by publishing or disseminating research analyses or research reports (electronic, printed or otherwise) to provide advice related to digital tokens"
This may mean that if you, as a KOL or institution, publish a report in Singapore that analyzes the value of a token's investment, you may theoretically need a DTSP license or risk being found illegal.
The Blockchain Association of Singapore has posed a soul-searching question to MAS regarding this issue:
"Will traditional research reports be deemed related to token sales or offers? How should participants distinguish research reports related to token sales or offers?"
The MAS has not provided a clear response, and this ambiguity can be said to make all content creators walk on thin ice.
Which groups may be affected?
Personal Identity Type (High Risk)
Independent professionals: including developers, project consultants, market makers, miners, etc.
Content creators and KOLs: including analysts, KOLs, community operations, etc.
Core project personnel: including founders, BD, sales, and other core business personnel
Institution Type (High Risk)
Unlicensed exchanges: CEX, DEX
Project party: DeFi, wallet, NFT, etc.
Conclusion: The End of the Regulatory Arbitrage Era in Singapore
A terrifying reality is emerging: Singapore is serious this time, aiming to "blast out" all non-compliant individuals. As long as you are non-compliant, almost any activity related to digital tokens may fall under regulatory scrutiny. Whether you are in a luxury office building or on your sofa at home, whether you are a CEO of a large company or a freelancer, as long as you are involved in digital token services.
Due to the large gray areas and vague definitions surrounding the terms "business premises" and "conducting business," MAS is likely to adopt a "case-based" enforcement strategy—first to take down a few chickens, and then to warn the monkeys.
Want to temporarily seek compliance? Sorry, MAS has clearly stated that it will approve DTSP licenses in an "extremely cautious" manner, and applications will only be approved in "extremely limited circumstances."
In Singapore, the era of regulatory arbitrage has officially ended, and the age of big fish eating small fish has arrived.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
"Singapore's "Wipe Out" Web3, the Era of Regulatory Arbitrage is Over, and a Web3 "Great Retreat" is Coming"
Written by: Spinach Spinach
The Monetary Authority of Singapore (MAS) released a response document on the new regulations for Digital Token Service Providers (DTSP) on May 30, 2025, and many are still unaware that this will actually impact the landscape of the entire Web3 industry in Asia.
The new regulations will officially take effect on June 30, 2025, and MAS has clearly stated that there will be no grace period! A large-scale "Singapore Web3 exodus" may have quietly begun.
"We will be extremely cautious." When the MAS expresses this attitude unabashedly in this stern consultation document, Singapore, once hailed by global Web3 practitioners as the "Asian crypto-friendly paradise," is bidding farewell to the past in a surprising manner—not through gradual policy adjustments, but through an almost "cliff-like" tightening of regulations.
For those project parties and institutions that are still observing, this may no longer be a question of "whether to leave," but rather a choice of "when to leave" and "where to go."
Former Glory: The Golden Era of Regulatory Arbitrage
Do you remember Singapore in 2021? When China fully banned cryptocurrency trading and the U.S. SEC was waving the regulatory stick, this small island nation welcomed Web3 entrepreneurs with open arms. Three Arrows Capital, Alameda Research, FTX Asia headquarters... one impressive name after another chose to settle here, not only because of the 0% capital gains tax but also due to the "embracing innovation" stance shown by MAS at that time.
At that time, Singapore was known as the "regulatory arbitrage paradise" of the Web3 industry. By registering a company here, one could legally and compliantly provide digital asset services to global users outside of Singapore while enjoying the reputation of being a financial hub. This business model of "being in Singapore while focusing on the global market" once attracted countless Web3 practitioners.
And now, the new DTSP regulations in Singapore mean that Singapore has completely closed the door to regulatory-friendly practices, and its attitude can be summarized in one sentence: to expel all unlicensed individuals from the Web3 industry out of Singapore.
What is DTSP? A definition that makes one "think deeply and feel scared".
DTSP stands for Digital Token Service Provider. According to the definition in Section 137 of the FSM Act and the content of Document 3.10, DTSP includes two types of entities:
Individuals or partnerships operating at a place of business in Singapore;
Singapore companies providing digital token services outside of Singapore (regardless of whether the company originates from Singapore or elsewhere)
This definition seems simple, but it actually hides dangers.
First of all, what is the definition of "place of business" in Singapore? The definition of "place of business" given by MAS is "any location in Singapore used by a licensee to conduct business (including a stall that can move from one location to another)."
Note several key points in this definition:
To put it simply, as long as you are not licensed in Singapore, there is a risk of breaking the law by conducting any business involving digital assets in any venue, whether you are a local company in Singapore or an overseas company, whether you are targeting local or overseas customers in Singapore.
So will working from home be illegal?
In response to this issue, Baker McKenzie law firm submitted feedback to MAS in the document.
Baker McKenzie law firm specifically sought clarification from MAS regarding this issue:
"Given the prevalence of remote work, is it the intention of MAS's policy to cover individuals employed by overseas entities but working from home or residential premises in Singapore?"
The concerns of the law firm are very real. They listed several possible scenarios that could lead to pitfalls:
But at the same time, the law firm is also trying to provide some "amulets" for those working from home:
However, MAS poured a bucket of cold water on this issue:
"Pursuant to section 137(1) of the FSMA, a DTSP licence is required for all individuals who are engaged in the business of providing digital token services outside Singapore on their premises in Singapore, unless the individual falls under section of the FSMA A category of persons specified in 137(5). In this regard, if an individual is located in Singapore and is engaged in the business of providing digital token services to persons outside Singapore (i.e. individuals and non-individuals), the individual will need to apply for a licence under section 137(1) of the Financial Services and Markets Act. However, if an individual is an employee of a foreign-incorporated company that provides digital token services outside of Singapore, the work performed by the individual as part of his or her employment with a foreign-registered company will not in itself trigger the licensing requirements under section 137(1) of the FSMA."
and
"However, if these individuals work in shared office spaces or in the offices of affiliated companies overseas, they are clearly more likely to be included in the scope."
!
In summary, the new regulations are:
Without a license, neither individuals nor companies are allowed to conduct business targeting local or overseas clients in any business premises in Singapore.
If you are an overseas employee, working from home is acceptable.
But there are also many vague areas in the new regulations:
The definition of an employee in MAS is very vague, is the project founder an employee, and is holding shares an employee? It's all up to MAS
If you are a BD or salesperson of an overseas company, and you go to someone else's shared office to talk about business, is it considered to be doing business in the business place? MAS has the final say
Definition of fuzzy digital token services, will KOL also be affected?
MAS's definition of digital token services is staggeringly broad, covering almost all relevant token types and services. And even the publication of research reports is included?
According to the provisions of Item (j) of Schedule 1 of the FSM Act, the regulatory scope includes:
"Any services related to a sale or offer of Digital Tokens, including (1) providing advice related to Digital Tokens, either directly or through publications, articles, or any other form (electronic, printed or otherwise), or (2) by publishing or disseminating research analyses or research reports (electronic, printed or otherwise) to provide advice related to digital tokens"
This may mean that if you, as a KOL or institution, publish a report in Singapore that analyzes the value of a token's investment, you may theoretically need a DTSP license or risk being found illegal.
The Blockchain Association of Singapore has posed a soul-searching question to MAS regarding this issue:
"Will traditional research reports be deemed related to token sales or offers? How should participants distinguish research reports related to token sales or offers?"
The MAS has not provided a clear response, and this ambiguity can be said to make all content creators walk on thin ice.
Which groups may be affected?
Personal Identity Type (High Risk)
Institution Type (High Risk)
Conclusion: The End of the Regulatory Arbitrage Era in Singapore
A terrifying reality is emerging: Singapore is serious this time, aiming to "blast out" all non-compliant individuals. As long as you are non-compliant, almost any activity related to digital tokens may fall under regulatory scrutiny. Whether you are in a luxury office building or on your sofa at home, whether you are a CEO of a large company or a freelancer, as long as you are involved in digital token services.
Due to the large gray areas and vague definitions surrounding the terms "business premises" and "conducting business," MAS is likely to adopt a "case-based" enforcement strategy—first to take down a few chickens, and then to warn the monkeys.
Want to temporarily seek compliance? Sorry, MAS has clearly stated that it will approve DTSP licenses in an "extremely cautious" manner, and applications will only be approved in "extremely limited circumstances."
In Singapore, the era of regulatory arbitrage has officially ended, and the age of big fish eating small fish has arrived.