In recent years, Singapore has been one of the most favored "bases" for global virtual currency and Web3 enterprises. With its lenient policies, stable legal system, and open innovative environment... for a time, various crypto players flocked in, treating Singapore as the "Crypto Capital of Asia".
But the tides have turned. Today, Singapore is gradually shifting from its early "encouraging innovation" model to a more prudent "risk prevention" approach. From a policy perspective, some even wonder if Singapore is trying to completely eliminate Web3.
In the view of Lawyer Liu - it has simply completed its "primitive accumulation" and is now beginning fine-tuned governance.
I. Early Stage: Welcome Everyone, First Make the Cake Bigger
Singapore was never a "conservative" from the start. After launching the Payment Services Act (PSA) in 2019, it clearly defined the legal status of Digital Payment Token (DPT) services, providing a clear licensing path for crypto exchanges and wallet services. With MAS (Monetary Authority of Singapore) always encouraging technological innovation, a wave of Web3 projects began landing here, including experimental projects like "Project Ubin" and "Project Orchid" exploring central bank digital currencies and tokenized assets.
We can understand that stage as "seizing the opportunity" - as long as the compliance baseline is not crossed, bold attempts were welcome. For many startup teams, this was an invaluable "window period".
II. After the Meltdown: Can't Just Focus on Making Money
However, as the industry expanded, some hidden risks exploded.
In 2022, Three Arrows Capital (3AC) "went bankrupt" in Singapore, followed by the collapse of FTX, which was heavily invested in by Temasek, putting significant pressure on Singapore's financial management. After all, in the most globally scrutinized compliant industry, if a financial center encounters issues, it's not just a corporate problem, but a national credit problem.
As a result, Singapore's regulatory bodies acted swiftly. On one hand, they strengthened the regulation of crypto service providers institutionally, such as introducing the more stringent Financial Services and Markets Act (FSM); on the other hand, they also placed clear restrictions on retail investors, emphasizing "crypto trading cannot be like buying lottery tickets".
III. Retail Investors: Sorry, Singapore No Longer Welcomes "Gamblers"
The most typical example is the regulatory guidelines issued by MAS at the end of 2023, which directly "applied the brakes" to retail investor activities.
The policy clearly stipulates: Crypto service providers cannot offer any form of rewards to retail investors, such as cashback, airdrops, or trading subsidies; they cannot provide leverage or credit card funding that amplifies risks; they must even assess users' risk tolerance and set investment limits based on net asset value.
In short, Singapore wants rational investors, not crypto "gamblers" who go "all in on BTC".
IV. Service Providers: Non-Compliant Ones, Directly "Show Them the Door"
By 2025, this trend becomes increasingly apparent. In the final policy guidelines issued by MAS on May 30, it stipulates: All enterprises without a Digital Token Service Provider (DTSP) license that want to serve overseas customers must "clear the field" by June 30, 2025, at the latest. No transition period, no room for negotiation.
Who can stay? Currently, only a few top enterprises have been approved, such as Coinbase, Circle, HashKey, OKX SG, etc. Another 24 enterprises are in an exemption state, like Cobo, Matrixport, Antalpha, etc. These enterprises have either passed strict anti-money laundering and risk reviews or have high compliance and background cooperation.
The rest? Either move to other markets or quickly "go legitimate".
V. Fund Sector Also Tightens: Not Just Having Money, But Understanding Money
Besides retail investors and service providers, Singapore has not let fund managers off the hook.
In traditional finance, Singapore has always been the fund center of the Asia-Pacific region. Now, incorporating virtual assets into the regular fund management process is their next goal.
MAS stipulates that if you want to establish a crypto fund in Singapore, even if you only serve "qualified investors", you must have the corresponding qualifications. Hedging risks, identifying client assets, establishing internal risk control processes, and even anti-money laundering reporting mechanisms must be complete.
In other words, the era of "a few crypto big shots + a PPT + an overseas team" establishing a fund is completely over in Singapore.
In Conclusion: Suppression or Evolution?
Many people looking at this regulatory upgrade lament, "Singapore is no longer a Web3 paradise." But from another perspective, you'll find this is actually the normal evolution of regulation - from "allowing trial and error" to "standardizing order", a path every emerging market must walk before maturity. Today's Singapore no longer welcomes people coming to "milk projects" with a speculative mindset, but for teams with real technology, capability, and long-term planning, it remains one of the most attractive markets globally.
As MAS Deputy Managing Director Ho Hern Shin said: "We welcome responsible innovation but absolutely will not tolerate abuse of trust." In other words - if you want to do something significant in Web3, Singapore's door is still open. But don't think about coming here to "make a quick buck".
However, some argue that the development of the crypto world and the entire Web3 industry is still in a relatively primitive stage, with its future prototype not even fully formed. Imposing strict regulations on an underdeveloped industry is like throwing out the bathwater with the baby, which cannot solve all problems.
