From Paradise to "Restricted Area": 5 Web3 Practitioners' Experiences During the Singapore Regulatory Storm

Interviewed, collated: Louis, ChainCatcher

Original Title: From the Republic of Ideals to "Exile Land": The Changing Landscape of Singapore Through the Eyes of 5 Web3 Practitioners

June 30, 2025, is a red line marked on the calendar of every practitioner in the Web3 circle of Po County.

From this day forward, according to Article 137 of Singapore's Financial Services and Markets Act (FSMA): all individuals or companies providing services related to digital tokens must obtain a Digital Token Service Provider (DTSP) license, as long as they have a place of business in Singapore, regardless of whether their clients are in Singapore, or they will face criminal liability.

The Monetary Authority of Singapore (MAS) made it clear in its regulatory response document issued on 30 May that those who have not yet been licensed by that time must immediately cease their overseas operations; The Pending status is not accepted as a basis for legal existence. This wording has been interpreted by many as "the strictest crypto regulation ever".

In this regard, ChainCatcher consulted professional lawyers about the overlooked key points in this FSMA document. In addition, we also interviewed five practitioners based in Singapore, trying to restore the real situation of Web3ers in Singapore and understand their views on the regulatory changes in Singapore.

Note: In this article, MAS refers to the financial regulatory authority of Singapore, PSA is the law introduced in 2019, which was initially focused on crypto payment services, FSMA is the newly updated regulatory bill launched in 2022, which provides more comprehensive regulations including the management of token-related services, and DTSP refers to individuals or companies that provide token trading, custody, transfer, and other services, which are the main subjects of regulation under FSMA.

1. Key Points of the Overlooked Bill

During the interview with Lawyer Guo Yatao, Director of the Digital Economy Special Committee at Beijing Strategy Law Firm, we discovered the following key legislative contents that readers should pay attention to:

1. FSMA is not an overseas patch, but a comprehensive upgrade, and both domestic and foreign businesses are restricted

Many industry insiders mistakenly believe that the FSMA is only to fill the gaps left by the original Payment Services Act (PSA) in regulating Singaporean enterprises serving overseas clients. However, Lawyer Guo emphasized: "The FSMA is a framework law for comprehensive regulation, with multiple parts applicable to entities providing financial services within Singapore." This means that regardless of whether the business targets domestic or overseas clients, as long as there is a place of business in Singapore or the company is registered in Singapore, it must comply with the FSMA. This "penetrative regulation" logic also marks the official start of comprehensive regulation by MAS for local Web3 practitioners.

2. The regulatory focus has shifted from "institutional licensing" to "individual review."

PSA mainly focuses on the compliance of enterprises and institutions, while FSMA introduces a regulatory mechanism for individuals. Lawyer Guo pointed out: "FSMA allows MAS to bypass the traditional institutional licensing framework, directly intervening and isolating high-risk individuals in the financial market, achieving a penetrating regulation of individuals." This means that even freelancers, remote developers, consultants, or KOLs who are not in management, as long as they engage in relevant services within Singapore, may be recognized as regulated entities by MAS. "It is required to fully understand the FSMA framework and have relevant work experience," thus significantly raising the threshold for individual practitioners.

3. The threshold for FSMA has been significantly raised, and the compliance requirements far exceed those of PSA.

Even if you already have a PSA license, it cannot be used automatically. "At present, most of the approved crypto business licenses in the market are still issued based on the PSA, and the FSMA has significantly raised the compliance threshold. MAS has made it clear that even businesses that have already obtained a PSA license will need to resubmit supplementary materials to meet FSMA requirements. To apply for a DTSP license, you must not only have an initial capital of S$250,000, a resident compliance officer, but also establish an independent audit mechanism, submit regular compliance reports, and meet the anti-money laundering and counter-terrorism financing processes and supporting management systems.

II. Let's see what Web3 practitioners in Po County have to say?

From wide coverage, to more detailed requirements, to higher thresholds, the tightening of regulations has indeed caused a lot of pressure and panic for Web3er. However, the regulations on paper are on paper, and whether or not a country's policy welcomes Web3 depends on what the actual enterprises and practitioners say. In the interview with ChainCatcher, we also heard very different voices - from the start-up team who had no choice but to move away, to the individual workers who chose to wait and see, to the old immigrants who are still optimistic about the long-term potential of the country, their stories have pieced together a real picture of the implementation of the policy:

1. Tokenization operation project founder Chari: Small businesses have their own way to survive, and the river will always find a way out.

We have indeed been affected. In the current cryptocurrency space, almost all meaningful products ultimately revolve around trading as the core. And once trading is involved, it is bound to touch upon the regulatory red line of DTSP. Regulation should serve companies with mature business models and clear structures, but for small teams like ours, investing a significant amount of time and resources to deal with regulation is almost an unbearable burden.

It is clear that Singapore is no longer suitable for start-up projects, and perhaps Singapore has never wanted to be the cradle of start-ups, and they only want to be the headquarters of established companies. We are not even sure what will become of our business next month, and we do not rule out the possibility of moving out of the country completely in the future. However, I will be optimistic about the changes, after all, "small businesses must have their own way of survival".

2. A geek teenager (pseudonym) who has been deeply involved in OTC trading for many years: Singapore is a "pragmatic scumbag", whoever has value stays.

I feel that the Web3 industry has been somewhat excluded, whether it is driven out of China or the current marginalization of 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 background color of Singapore's regulation. To put it bluntly, the Singapore government is like a "pragmatic scumbag": whoever can bring substantial value can stay; Whoever just brings the bubble, then send the guest appropriately. Those who have been issued licenses can continue to do it, and the others have to be cleared, which is a very clear signal.

However, from my perspective, this round of regulation is not that heavy-handed; it is more like—"a big noise with little rain," mainly intended to rattle the tiger. The companies that truly need licenses have already applied for them, and those bosses who have made contributions to the government, or who are genuinely capable, will not be anxious because of this new round of regulations.

As for the reason for the sudden tightening of regulations, I think it has something to do with the gray industry and shell companies that exist in Southeast Asia. MAS's current goal is actually to sound a wake-up call to some less regulated KOLs and scattered groups through this wave of regulations. They may not be able to cut out these people all at once, 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 remain on the sidelines, as everyone is waiting for a clearer signal.

3. John, a practitioner who has been deeply involved in the Web3 AI field in Singapore for many years: Looking beyond the phenomenon to understand the essence, where there is a cause, there must be an effect.

I want to emphasize a word: pragmatism. This is my core understanding of Singapore's governance style over the years. Singapore's efficiency and adherence to rules are fundamentally aimed at ensuring economic benefits and securing a stable position in the international political and financial landscape. The increasingly strict regulatory terms this time are actually due to some issues in the Web3 field that need to be addressed, and the government must intervene to ensure the healthy development of the ecosystem.

My project is currently not directly affected, but I can see that this round of policy adjustments has indeed brought considerable impact to some exchanges that have not yet obtained licenses, as well as to the project parties and ecological partners collaborating with them. In particular, for those KOLs who play a financial advisory role in the Web3 circle, the pressure from the policies has already been transmitted to them and has had a certain deterrent effect.

Recently, I have also noticed that more and more freelancers and remote workers are starting to prefer working from home and avoiding actively discussing Web3-related topics in public. Everyone is trying to reduce risks and minimize unnecessary troubles.

4. Reddio founder Neil, who has lived in Singapore for nearly 20 years: Nothing has changed, Web3 is still a part of Singapore's national strategy.

In fact, Singapore's regulatory policies in the Web3 field in recent years have not taken a drastic turn, but are more of a clarity and refinement of the existing framework. According to MAS's latest clarification and Lianhe Zaobao's report, the focus of this regulation is on digital payment tokens (DPTs) and tokens with capital market attributes, and the utility tokens and governance tokens that we often call are not currently among the core of its regulation.

For most start-ups, Singapore remains a well-established environment, with a clear path and abundant resources. Not only does MAS maintain a high level of transparency over the years, but it also has an open consultation mechanism, so it is not difficult for companies to assess their compliance. It costs a few thousand Singapore dollars to get legal advice at a reasonable cost.

From a longer-term perspective, Web3 remains part of Singapore's national strategy. In addition to a clear policy framework, the government is also promoting ecological development through various ways such as financial support, talent cultivation, and industry alliances, and Singapore's Ministry of Education also encourages universities to offer blockchain courses. Personally, I have always believed that Singapore is still the most inclusive and trusted choice for entrepreneurs in the world when it comes to finding a place that truly balances regulatory rationality and industrial dynamism.

5. GM Agents' founder Chess: It is a reshuffling period, but it is targeted at the financial sector rather than everyone.

For us, the current regulatory changes have not had a significant impact, and we are an AI start-up that we plan to continue to build in Singapore. I think this round of regulation is more for companies and projects with strong financial attributes, and for small teams like ours, the actual impact is relatively limited. There is nothing going on in the big factories in the currency circle, but in fact, it is not the turn of the small team to worry.

When it comes to Singapore's start-up environment, I've always found it to be a great place for small teams or even solo start-ups. Especially for overseas Chinese like me, Singapore has a natural affinity in language and culture, low communication costs, and faster landing. While some people feel that Singapore is conservative in some of its policies, it seems to me that it is still a fair, open and rational place to look at innovation compared to many other regions. On the basis of adhering to order, Singapore is indeed willing to give opportunities to innovators.

Conclusion

This tightening of regulations is essentially a self-calibration of Singapore as an international financial center, rather than a drive away from the Web3 industry. Rather than being simply divided into fleeing and staying behind, Web3 practitioners are re-choosing and reconsidering: whether to stay and accept higher levels of regulation in exchange for long-term policy certainty, or to move to markets that appear to be friendlier but filled with more uncertainty.