Interview and compilation: Louis, ChainCatcher
Original Title: From Utopia to "Expulsion Zone": The Changing Landscape of Singapore Through the Eyes of 5 Web3 Practitioners
June 30, 2025, is a red line on the calendar of every Web3 practitioner in Singapore.
From this date, according to Section 137 of Singapore's Financial Services and Markets Act (FSMA): All individuals or companies providing digital token-related services, with an office in Singapore, must obtain a Digital Token Service Provider (DTSP) license, regardless of whether their services target Singapore, or face criminal liability.
The Monetary Authority of Singapore (MAS) clearly stated in the regulatory response document released on May 30 that those without a license by then must immediately cease overseas business; the "application in progress" status will not be accepted as a legal basis of existence. This wording has been interpreted by many as "the strictest crypto regulation in history".
ChainCatcher consulted professional lawyers about the overlooked key points in this FSMA document. Additionally, we interviewed 5 practitioners based in Singapore to restore the real situation of Web3 professionals and understand their perspective on Singapore's regulatory changes.
Note: In this article, MAS is Singapore's financial regulatory authority, PSA is a law launched in 2019 that initially managed crypto payment services, FSMA is a comprehensive regulatory law introduced in 2022 that includes management of token-related services, and DTSP refers to individuals or companies providing token trading, custody, transfer, and other services, which are the primary focus of FSMA regulation.
I. Overlooked Core Points of the Law
During an interview with Guo Yatao, a lawyer and director of the Digital Economy Committee at a Beijing strategy law firm, we discovered several noteworthy aspects of the law:
1. FSMA is not an overseas patch, but a comprehensive upgrade that constrains both domestic and overseas businesses
Many industry professionals mistakenly believe FSMA is merely to address gaps in the previous Payment Services Act (PSA) for Singapore companies serving overseas clients. However, the lawyer emphasized that "FSMA is a comprehensive regulatory framework law, with multiple sections applicable to entities providing financial services within Singapore". This means that regardless of whether the business targets domestic or overseas markets, any company with an office in Singapore or registered in Singapore must comply with FSMA. This penetrative regulatory logic also marks the official start of MAS's comprehensive regulation of local Web3 practitioners.
2. Regulatory focus shifts from "institutional licenses" to "individual review"
PSA primarily focused on corporate and institutional compliance, while FSMA adds a regulatory mechanism for individuals. The lawyer pointed out that "FSMA allows MAS to bypass traditional institutional licensing frameworks, directly intervening and isolating high-risk personnel in the financial market, achieving penetrative individual regulation". This means that even non-management freelancers, remote developers, consultants, or KOLs working in Singapore-related services could be deemed regulatory targets by MAS, requiring "full understanding of the FSMA framework and relevant professional experience", thereby significantly raising individual entry barriers.
3. FSMA's threshold is significantly raised, with compliance requirements far exceeding PSA
Even existing PSA license holders cannot automatically transfer. The lawyer noted: "Most currently approved crypto business licenses are based on PSA, but FSMA significantly raises compliance thresholds. MAS explicitly states that even companies with PSA licenses must resubmit supplementary materials to meet FSMA requirements." Applying for a DTSP license requires 250,000 Singapore dollar initial capital, a permanent compliance officer, an independent audit mechanism, regular compliance reports, and a management system for anti-money laundering and counter-terrorism financing processes.
II. What Do Web3 Practitioners in Singapore Say?
From broad coverage to more detailed requirements and raised thresholds, the tightening regulation has indeed caused pressure and panic among Web3 professionals. However, to truly understand a country's policy towards Web3, one must look beyond paper regulations and hear from actual businesses and practitioners. In ChainCatcher's interviews, we heard diverse perspectives - from startups forced to relocate, to individual workers choosing to wait and see, to long-term immigrants still optimistic about Singapore's potential:
1. Token Operation Project Founder Chari: Small Businesses Have Their Own Survival Strategies
We have indeed been affected. In the current crypto space, almost all meaningful products ultimately cannot avoid the core of trading. Once trading is involved, it inevitably touches the DTSP regulatory red line. Regulation should serve mature companies with clear business structures, but for small teams like us, investing significant time and resources to engage with regulation is almost an unbearable burden.
It's clear that Singapore is no longer suitable for early-stage project development. Perhaps Singapore never intended to be a startup incubator, only hoping to be a headquarters for mature enterprises. We can't even predict our business form next month and don't rule out completely leaving Singapore in the future. However, I'll maintain an optimistic attitude towards changes, as "small businesses certainly have their own survival strategies".
2. OTC Trading Veteran (Pseudonym): Singapore is a "Pragmatic Playboy" - Value Determines Stay
I've felt Web3 has always been somewhat marginalized, whether previously pushed out by China or currently being sidelined in Singapore. Objectively, as a long-time OTC business practitioner in Singapore, I've always believed pragmatism is the underlying tone of Singapore's regulation. Bluntly put, the Singapore government is like a "pragmatic playboy": whoever brings substantial value can stay; whoever brings only bubbles will be appropriately shown the door. Those with licenses can continue, others must be cleared out - this is a very clear signal.
From my perspective, this regulation isn't as harsh, more like "thunder without rain", mainly a warning. Companies truly needing licenses have already applied. Those contributing to the government or truly capable bosses won't be anxious about this new regulation.
As for why regulation suddenly tightens, I believe it's related to gray areas and shell companies existing in Southeast Asian crypto spaces. MAS's current goal is to use these regulations to warn less regulated KOLs and scattered groups. They may not completely eliminate these people but hope to constrain them through legal frameworks.
From what I know, some KOLs and exchange practitioners have recently chosen to pause operations, take a vacation, or maintain a wait-and-see attitude, all waiting for a clearer signal.
3. John, Long-term Web3 AI Practitioner in Singapore: Looking Beyond Phenomena
I want to emphasize one word: pragmatic. This is my core understanding of Singapore's governance style. Singapore's efficiency and rule adherence fundamentally aim to ensure economic benefits and secure a stable position in international political and financial negotiations. This increasingly strict regulatory clause actually exists because some issues in the Web3 domain need direct government intervention to ensure healthy ecosystem development.
My project is currently not directly impacted, but I can see that for unlicensed exchanges and their partner projects and ecosystem collaborators, this policy adjustment indeed brings significant challenges. Especially for KOLs in financial advisory roles in the Web3 space, policy pressure has already reached them, serving as a certain deterrent.
Recently, I have also noticed that more and more freelancers and remote workers tend to work from home and avoid actively discussing Web3-related topics in public, as everyone is trying to reduce risks and minimize unnecessary troubles.
4, Living in Singapore for nearly 20 years, Reddio founder Neil: Everything hasn't changed, Web3 is still part of Singapore's national strategy
In fact, Singapore's regulatory policies in the Web3 field have not undergone a drastic turn in recent years, but rather a clarification and refinement of existing frameworks. According to the latest clarification from MAS and reports from Lianhe Zaobao, the focus of this regulation is on digital payment tokens (DPTs) and tokens with capital market attributes, while the Utility Tokens and Governance Tokens we often talk about are currently not at the core of regulation.
For most startups, Singapore remains an environment with clear systems, clear paths, and abundant resources. MAS not only maintains high transparency in the long term but also has an open consultation mechanism. It is not difficult for enterprises to assess their compliance. Obtaining legal advice for a few thousand Singapore dollars is also reasonable.
From a longer-term perspective, Web3 is still part of Singapore's national strategy. In addition to a clear policy framework, the government promotes ecosystem development through various means such as funding support, talent cultivation, and industry alliances. The Singapore Ministry of Education also strongly encourages universities to offer blockchain courses. I personally always believe that globally, if one wants to find a place that truly balances regulatory reasonableness and industrial vitality, Singapore remains the most inclusive and most trustworthy choice for entrepreneurs.
5, GM Agents founder Chess: It's a reshuffling period, but targeting those with a financial orientation rather than everyone
For us, the current regulatory changes have not brought obvious impacts. We are an AI startup and still plan to continue building in Singapore. I believe this round of regulation is more aimed at enterprises and projects with strong financial attributes, and for small teams like ours, the actual impact is relatively limited. The big players in the crypto are fine, so small teams don't need to worry.
Talking about Singapore's entrepreneurial environment, I have always felt that it is very suitable for small teams, even individual entrepreneurs. Especially for overseas Chinese like me, Singapore has a natural affinity in language and culture, with low communication costs and faster landing. Although some people think Singapore is conservative in certain policies, in my view, it is still a fair, open, and rational place that views innovation. On the basis of maintaining order, Singapore is indeed willing to give innovators opportunities.
Conclusion
This regulatory tightening is essentially a self-calibration by Singapore as an international financial center, rather than a drive-out of the Web3 industry. Web3 practitioners have not been simply divided into those who flee and those who stay. Instead, they are re-selecting and considering: whether to stay and accept more intense regulation in exchange for long-term policy certainty, or turn to markets that seem more friendly but are full of more uncertainties.
