Interview, editing: Louis, ChainCatcher
June 30, 2025, is a red line written on the calendar of every practitioner in the Poxian Web3 circle.
From this day on, according to Section 137 of Singapore's Financial Services and Markets Act (FSMA): All individuals or companies providing digital token-related services, as long as they have a place of business in Singapore, regardless of whether the service recipients are in Singapore, must obtain a Digital Token Service Provider (DTSP) license, otherwise they will face criminal liability.
The Monetary Authority of Singapore (MAS) clearly stated in the regulatory response document released on May 30 that those who have not yet obtained a license must immediately stop their overseas business; the "application in progress" status will not be accepted as a basis for legal existence. This wording was interpreted by many as "the strictest crypto regulation ever."
In this regard, ChainCatcher consulted professional lawyers about the key points that were overlooked in this FSMA document. In addition, we also interviewed 5 practitioners based in Singapore to try to restore the real situation of Web3 er in Singapore and understand the regulatory changes in Singapore from their perspectives.
Note: In this article, MAS is Singapore's financial regulator. PSA was launched in 2019 and is an early law specifically for crypto payment services. FSMA was launched in 2022. The new and more comprehensive regulatory bill has added management of token-related services. DTSP refers to individuals or companies that provide token trading, custody, transfer and other services, and are the focus of FSMA supervision.
I. The neglected key points of the bill
During an interview with Guo Yatao, a lawyer at Beijing Strategy Law Firm and director of the Digital Economy Committee, we found the following contents of the bill that deserve readers' attention:
1. FSMA is not an overseas patch, but a comprehensive upgrade that restricts both domestic and overseas businesses
Many industry insiders mistakenly believe that FSMA is only intended to fill the loopholes in Singaporean companies serving overseas customers that the original Payment Services Act (PSA) failed to regulate, but lawyer Guo emphasized: "FSMA is a framework law for overall supervision... Many parts of it apply to entities that provide financial services in Singapore", which means that no matter whether the business is domestic or overseas, as long as there is a business place in Singapore or a company registered in Singapore, it must comply with FSMA. This penetrating supervision logic also marks the official start of MAS's comprehensive supervision of local Web3 practitioners.
2. The regulatory focus shifts from “institutional license” to “individual review”
PSA mainly focuses on the compliance of enterprises and institutions, while FSMA has added a new regulatory mechanism for people. Lawyer Guo pointed out: "FSMA allows MAS to bypass the traditional institutional licensing framework, directly intervene and isolate high-risk personnel in the financial market, and achieve penetrating supervision of people." This means that even non-management freelancers, remote developers, consultants or KOLs, as long as they provide related services in Singapore, may be identified as regulatory objects by MAS. "Fully understanding the FSMA framework and having relevant working experience are required", thus greatly raising the threshold for individuals to enter the industry.
3. The threshold of FSMA is significantly raised, and the compliance requirements far exceed those of PSA
Even if you already hold a PSA license, it cannot be automatically used. Lawyer Guo pointed out: "Most of the approved crypto business licenses on the market are still issued based on PSA. FSMA has significantly raised the compliance threshold... MAS has made it clear that even companies that have obtained a PSA license must resubmit supplementary materials to meet FSMA requirements." To apply for a DTSP license, you must not only have an initial capital of 250,000 Singapore dollars and a resident compliance officer, but also establish an independent audit mechanism, submit compliance reports regularly, and meet the anti-money laundering and anti-terrorist financing processes and supporting management systems.
2. Let’s see what Web3 practitioners in Po County say?
From wide coverage to more detailed requirements to higher thresholds, the tightening of supervision has indeed caused a lot of pressure and panic for Web3ers. However, regulations on paper are just on paper. What really reflects whether a country's policies welcome Web3 depends on what the companies and practitioners who have actually implemented it say. In the interview with ChainCatcher, we also heard completely different voices - from the startup team who had no choice but to move away, to individual workers who chose to wait and see, to the old immigrants who are still optimistic about the long-term potential of Singapore, their stories pieced together a real picture of the policy implementation:
1. Chari, founder of the tokenized operation project: Small businesses have their own way of survival, and the river will always find a way out
We have indeed been affected. In the current cryptocurrency world, almost all meaningful products cannot avoid trading. Once trading is involved, it will inevitably touch the DTSP regulatory red line. Supervision should serve companies with mature business models and clear structures. For a small team like us, investing a lot of time and resources in dealing with supervision is almost an unbearable burden.
It is obvious that Singapore is no longer suitable for the development of start-up projects. Perhaps Singapore has never thought about becoming a cradle for start-ups, and they only want to be the headquarters of mature companies. We are not even sure what the business will look like next month, and we are not ruling out the possibility of moving out of Singapore in the future. However, I will face the changes with an optimistic attitude, after all, "small businesses must have their own way of survival."
2. A geek boy (pseudonym) who has been deeply involved in OTC trading for many years: Singapore is a "pragmatic scumbag", whoever has value will stay
I feel that the Web3 industry has always been somewhat excluded, whether it was driven away by China before or is currently marginalized by small businesses in Singapore. But objectively speaking, as a practitioner who has been engaged in OTC business in Singapore for many years, I have always felt that pragmatism is the underlying tone of Singapore's regulation. To put it bluntly, the Singapore government is like a "pragmatic scumbag": whoever can bring substantial value can stay; whoever only brings bubbles will be appropriately sent away. Those who have been issued licenses can continue to do business, and others must be cleared out. This is a very clear signal.
However, from my point of view, this regulation is not so iron-fisted, but more like "loud thunder, little rain", mainly to scare the tiger. The companies that really need licenses have already applied for them, and those bosses who have contributed to the government or are truly capable will not be anxious about this round of new regulations.
As for why the regulation has suddenly tightened, I think it has something to do with the gray market and shell companies in Southeast Asia. The current goal of MAS is to use this wave of regulations to sound a warning to some less standardized KOLs and scattered groups. They may not be able to cut off these people in one fell swoop, but they hope to use the legal framework to force them to be more restrained.
As far as I know, some KOLs and exchange practitioners have recently chosen to suspend their business, go on a trip, or wait and see. Everyone is waiting for a clearer signal.
3. John, a practitioner who has been working in the field of Web3 AI in Singapore for many years: See the essence through the phenomenon, there must be a cause and an effect
I want to emphasize one word: pragmatic. This is my core understanding of Singapore's governance style. Singapore's efficiency and adherence to rules are essentially to ensure economic benefits and to strive for a stable position in international political and financial games. The regulatory terms are becoming more stringent this time because there are some problems in the Web3 field that need to be addressed, and the government must intervene to ensure the healthy development of the ecosystem.
My project has not been directly affected yet, but I can see that this round of policy adjustments has indeed brought a significant impact on some exchanges that have not yet obtained permission, as well as the project parties and ecological partners that cooperate with them. In particular, the pressure of the policy has been transmitted to those KOLs who play the role of financial advisors in the Web3 circle, and it has also played a certain deterrent role.
Recently, I have also noticed that more and more freelancers and remote workers are beginning to prefer working from home and avoiding discussing Web3-related topics in public. Everyone is trying to reduce risks and unnecessary troubles.
4. Neil, founder of Reddio, who has lived in Singapore for nearly 20 years: Nothing has changed, Web3 is still part of Singapore’s national strategy
In fact, Singapore’s regulatory policies in the Web3 field in recent years have not undergone a drastic shift, but rather a clarification and refinement of the existing framework. According to the latest clarification by MAS and the report of Lianhe Zaobao, the focus of this regulation is on digital payment tokens (DPTs) and tokens with capital market attributes, while the commonly mentioned utility tokens and governance tokens are not currently among the core of its regulation.
For most startups, Singapore is still an environment with clear systems, clear paths and abundant resources. MAS not only maintains high transparency for a long time, but also has an open consultation mechanism. It is not difficult for companies to assess their compliance. It costs only a few thousand Singapore dollars to get legal advice, which is reasonable.
From a longer-term perspective, Web3 is still part of Singapore's national strategy. In addition to a clear policy framework, the government also promotes ecological development through various means such as financial support, talent cultivation, and industry alliances. The Singapore Ministry of Education also strongly encourages universities to offer blockchain courses. I personally always believe that if you want to find a place that can truly balance regulatory rationality and industrial vitality around the world, Singapore is still the most inclusive and trustworthy choice for entrepreneurs.
5. Chess, founder of GM Agents: It is a period of reshuffle, but it is aimed at the financial sector rather than everyone
For us, the current regulatory changes have not brought a significant impact. We are an AI startup and we still plan to stay in Singapore to continue building. I think this round of regulation is more targeted at companies and projects with strong financial attributes, and for small teams like us, the actual impact is relatively limited. The big companies in the cryptocurrency circle have not had any problems yet, so it is not the turn of small teams to worry.
When it comes to Singapore's entrepreneurial environment, I have always felt that it is very suitable for small teams or even individual entrepreneurs. Especially for overseas Chinese like me, Singapore has a natural affinity in language and culture, low communication costs, and faster implementation. Although some people think that Singapore is conservative in some policies, in my opinion, it is still a fair, open and rational place to view innovation compared to many regions. On the basis of upholding order, Singapore is indeed willing to give innovators opportunities.
This tightening of regulation is essentially a self-calibration of Singapore as an international financial center, rather than a drive away of the Web3 industry. Web3 practitioners are not simply divided into two groups: fleeing and staying. On the contrary, they are re-selecting and considering: whether to stay and accept higher-intensity regulation in exchange for long-term policy certainty, or to turn to markets that seem more friendly but are full of more uncertainties.
