In the past two days, an article by Mr. Spinach, the head of Pharos Asia Pacific, has attracted the attention of the whole network, giving us such a picture - Singapore's Web3 retreat is coming, and the era of regulatory arbitrage is over...
On May 30, 2025, MAS released a response document to the new regulations for digital token service providers DTSP, many of whom are not yet aware of the impact on the Web3 industry in Asia, or the Web3 industry as a whole. Information is also fermenting, and more and more people are beginning to care, what does this mean?
001 Issue Crypto Tavern, the theme focuses on the latest Web3 regulations in Singapore!
The tavern invited:
Liu Honglin is the founder of Mankiw Law Firm
@Honglin_lawyer
Sam Techub News COO
@ixsamchow
Shao Jia Dian Partner Lawyer at Mankun Law Firm
@Web3_Jayden
Bai Zhen, Head of the Hong Kong Office of Mankun Law Firm
@Bai_Zhen_11
Spinach Spinach Pharos Head of Asia-Pacific Strategy
@bocaibocai_
Tavern Owner: Meg Makun ( Chengdu ) Builder
@MegZhang1986
Dongdong Robin, researcher at Mankun
@dongdongRobin
McGonagall Meg: Hello everyone and welcome to our crypto bistro in Mankiw, where our slogan is all year round. I'm McGonagall, and today I'm co-managing with Dongdong, also known as Robin, and welcome all of you to our inaugural virtual event, which will focus on the latest regulatory issues in Singapore. We asked Director Liu, the founder of our law firm, to share with us the origin of the crypto tavern.
Lawyer Liu Honglin: Okay, thank you, McGonagall. The driving force behind the crypto bistro is actually McGonagall and Dongdong, who are our researchers in Shenzhen and Chengdu, and are also the head of BD. McGonagall is a senior practitioner in the industry and has done a lot of industry-related things in Shenzhen before. They have been thinking about how to bring Mankiw closer to their industry partners and communicate more with each other. So they planned this weekly Thursday event, called Crypto Bistro, which is as relaxed and cozy as a pub, chatting about recent events and exchanging industry trends.
In addition to Mankun's "Entrepreneurship Web 3.0" interview program every Wednesday night, this column offers lighter topics. Entrepreneurship means risk and responsibility for many people, which feels a bit heavy, while the tavern format is more relaxed. When they mentioned Thursday, I thought of the "Crazy Thursday" meme, so I connected the two: "Crypto Tavern, Crazy Thursday." Today is the online opening, and as a guest of the tavern, I thank Mage and Dongdong for their efforts. Everyone is welcome to give them a thumbs up, and thank you all for visiting our online tavern!
Robin: Thank you, Mr. Honglin, listeners, friends, and guests, good evening! I'm very glad that today is the opening of the tavern. As the hosts, McGonagall and I had a lot of discussions, hoping that in addition to the "Startup Web 3.0" event every Wednesday, we would find a Crazy Thursday with a wider range of topics and a relaxed and diverse Twitter Space program. We hope that the guests invited in each issue can complain and talk about investment and entrepreneurship around the hot spots of Web3, or invite entrepreneurs, investors, KOLs, media, etc. to gather in the tavern like chatting and colliding sparks on the bar. Let's ask McGonagall to share her thoughts.
Meg: The legal profession is very rigorous and meticulous, while the Crypto or Web3 sector has many crazy aspects, like two extremes. The crypto tavern perfectly connects this feeling. We can chat a bit more openly on Twitter, so we thought of hosting this event on this channel. We hope everyone joins our Twitter Space.
Today we officially begin.
Q1: Singapore has always been regarded as a global web3 paradise. Why is it evaluated this way? Let’s share our impressions of Singapore's web3!
Sam:
Singapore has always been regarded as the Web3 paradise in Asia and even the world, attracting many practitioners to be fascinated. I'll start with a brief remark. In 2021, there was a complete ban on cryptocurrency trading in China, and the SEC is also cracking down on crypto companies. The most attractive thing about Singapore is the zero tax policy, such as Southeast Asia, Singapore, Thailand, Malaysia, Taiwan, Hong Kong and other places, where crypto-related taxes are zero, and there are more compliance licenses issued. Zero tax has a great impact on the cost of enterprises, and the tax rate of ordinary enterprises is often more than ten points, while the profit of the crypto industry may not be so high.
In the early days, Singapore's 0% capital gains tax, coupled with its compliance attitude and regulatory environment, attracted many businesses and entrepreneurs. Go to a welcoming place to do a compliant business and make compliant money. This was similar in the early days of Singapore. However, after the wild growth, there are negative events, such as someone taking a license to harvest a messy plate, or involving telemarketing and fraud, which affects the normal financial system. So it's reasonable that this regulatory shift has been traceable and has given the industry a cycle of savage growth and then began to shrink.
Lawyer Shao Jiadian:
When I was a graduate student in Singapore, I had the impression that Singapore's urban management, social governance, and legal system were like a garden. Their policy is not a one-size-fits-all policy, and it's very organized. The reasons why Singapore is regarded as a Web3 paradise are, firstly, the early introduction of regulatory sandbox and encryption regulations to attract entrepreneurs; the second is tax incentives; Third, as a financial center, Singapore has obvious advantages in talent in the technology and financial industries. Web3 combines technology, the Internet, and finance, and Singapore has a pool of outstanding talents. Coupled with the blend of Chinese and Western cultures, it is no problem to speak Chinese and English, which is suitable for Eastern and Western entrepreneurs. At that time, the United States and Chinese mainland encircled and suppressed the crypto industry, and many project parties chose Singapore, and even some projects insisted on setting up foundations or entities when they were not in Singapore, causing the impression of Web3 paradise.
Bai Zhen:
I'm in Hong Kong, and you're right. With zero capital gains tax, regulatory sandbox, and a well-established legal system, Singapore has become a Web3 paradise since 2021. MAS is positioned as a crypto hub in Asia, attracting FTX, Three Arrows Capital, etc., allowing enterprises to serve global users without local licenses, and the model of being based in Singapore and having a global business is a regulatory arbitrage advantage. Singapore is very capable, pragmatic, combining the best parts of the West with conservative practices, moving quickly and with a more regulatory style than Hong Kong and the United States. Recent negative events may prompt regulatory changes.
Lawyer Liu Honglin:
The previous guest was comprehensive, and I would like to add one point. The spinach article mentions that Singapore is going to kill Web3, and I have a slightly different point of view. The overall style of Singapore is to let the bullets fly for a while, and the regulatory policy has been thrown out in the past few years, and it has only recently been noticed. Negative events, such as the Fujian money laundering team and the FTX crash, have affected Singapore's image and sovereign fund investment. Teams, projects, and funds involved in virtual currencies are often related to the gray and black industry or money laundering, which puts great pressure on the regulatory authorities. Raising the bar is a feasible way to eliminate gray and black industries or weak teams, and let institutions with compliant budgets and funds stay. From a positive point of view, this round of operations hopes to retain large institutions, encourage compliance development, and basically refuse to leave small and micro entrepreneurial teams or teams with weak compliance capabilities. This could be a breaking point.
Sam adds:
I do not fully agree with what Spinach said about the "encirclement". The early barbaric development has evolved into a systematic structure; the market pie has grown larger, and leading institutions consolidate their positions through legislation, excluding small or non-compliant teams. Under the impact of Singapore's shift in attitude towards Web3 in Hong Kong, the growth points are limited, and contraction is a reasonable choice. In 2020, the payment services bill was introduced, and from 2020 to 2021, tens of millions of Singapore dollars were invested to support blockchain, similar to Hong Kong's actions in 2023.
The Singapore government investment agency, such as GIC, has also invested in projects like Bitcoin and DC. The tightening of regulations aims to allow compliant funds to enter and enhance the value of the Web3 industry. Although Singapore is small, with a population smaller than Hong Kong, it retains leading firms by contraction.
Dong Dong Robin:
Thank you for sharing. The reasons why Singapore is considered a Web3 paradise are clear: zero taxes, regulatory sandboxes, talent advantages, and a mix of Chinese and Western cultures make it a hotspot for startups. This regulation is not necessarily as serious as extermination, but for the purpose of standardization, retaining large compliance institutions, and promoting the long-term development of the industry.
Q2: The new MAS regulations are called cliff tightening, what is DTSP? To put it simply, what exactly are the new regulations governing?
Lawyer Shao Jiadian:
In fact, this regulation is not new, it stems from Chapter 9 of the Financial Services and Markets Act 2022, which requires a license for digital token service providers (DTSPs), that is, individuals, partnerships or companies registered or principally engaged in Singapore to provide digital token services to overseas customers. A draft for comments will be released in October 2024, and a response document will be issued on May 30, 2025, with effect from June 30. Those who have not obtained a license must stop providing services overseas. The scope of supervision includes virtual asset and fiat currency exchange, transfer, payment, custody, agency issuance, sales, intermediary services, investment advice, etc. Not for Singapore-based services (with licensing requirements) or non-digital token services. The title may be broad, not to exterminate Web3, but to tighten regulations on cross-border services. This requirement has been in place since 2022, and the scope of application needs to be clarified.
Spinach Spinach:
I found that friends in the Singapore Web3 community mentioned that the new regulations have a significant impact, and after researching, I found it to be quite serious. There is little discussion on Twitter, so I spent four to five hours reviewing the legal provisions and wrote an article, which unexpectedly caused a stir in the entire community, and was said to be the culprit of the panic. The Financial Services and Markets Act (FSM) was passed in 2022 and is being implemented in phases, coming into effect for DTSP on June 30, 2025. It was announced in 2022, but it seems that everyone forgot about it over the past three years. Attention was only drawn to it after the MAS response document on May 30. My article became popular because many people were uninformed or unclear about the MAS's stance and specific regulations. I have collaborated with MAS over the past two years; the previous government supported innovation, while the new government leans towards AI and is not friendly towards Web3. MAS will bring all individuals and institutions involved in Web3 services under regulation, with enforcement starting on June 30, and the interpretation rights belong to MAS, causing panic due to its ambiguity.
Dongdong Robin:
Thank you, Mr. Shao and Mr. Spinach. Mr. Shao sorted out the ins and outs of the new regulations in detail, and clarified the regulatory scope and exceptions of DTSP. Mr. Spinach pointed out that the ambiguity of the new regulations and the tough attitude of MAS caused panic in the industry. This gives us a clearer picture of the new rules.
Q3: There is a point that everyone is following: will working from home remotely be illegal? Baker McKenzie also inquired about this issue with MAS, can everyone elaborate on this?
Spinach spinach:
During the consultation in 2024, the MAS was asked by law firms whether remote work is regulated. The MAS responded that employees of overseas companies working from home in Singapore, serving only offshore clients, and whose work falls under the labor contract, do not require a license. However, if they communicate with offshore clients in non-home settings, such as an office, it may be subject to regulation. The MAS provided vague explanations; for instance, it did not clarify whether overseas company executives or directors handling business while vacationing in Singapore counts, leaving loopholes and retaining broad enforcement powers, which caused panic.
Meg McG:
It sounds like regulation during the pandemic, where substance is more important than form. As long as it's for Singapore citizens or service provision, it might touch upon regulations. Please have Lawyer Shao explain in plain language.
Lawyer Shao Jiadian:
I read the MAS response document and the questions from Baker McKenzie. MAS responded simply: If you provide digital token services abroad in Singapore, you need to get a license; If you are an employee of an overseas company, you do not need a license to complete the company's internal work. The core is to distinguish between internal services (in-company) and external services (customer-facing). Individuals or independent studios are required to provide services outside of Singapore, such as sales, promotion, investment advice, etc. The presence or absence of a place of business does not affect the decision. KOLs or independent BDs that promote projects may fall under regulation and should be careful not to be construed as investment advice. Business activities during short-term business trips or tourism are not subject to supervision.
Sam:
The document defines two types of regulatory entities: one is an individual or enterprise operating in a Singapore business premises; Second, a Singapore-registered company provides services overseas. If it is not in the place of business, such as a personal residence, it may circumvent supervision. For example, KOLs doing cryptocurrency content at their own homes may not be considered a place of business. However, MAS is not clearly defined, and it actually looks at behavior. I know a lot of YouTubers in Singapore, such as Xiao Mo, who moved to Singapore due to taxes, they are not in the place of business, and theoretically may not be regulated.
Mr. Shaw added:
MAS responded that there are no requirements for a place of business, only stating that providing services to overseas clients in Singapore requires a license. An exception is for employees of overseas companies completing internal work for their employers. Long-term operations in Singapore aimed at overseas clients, whether from home or a shared office, may require a license. Business activities during short business trips or vacations are not subject to regulation.
Q4: What is the motivation behind the Singapore government?
Lawyer Liu Honglin:
There are several motives: first, the market is standardized, and after the wild growth, it is necessary to attract compliant funds to ensure taxation and sustainable development; The second is to deal with negative events, such as money laundering and the FTX thunderstorm, which affect Singapore's image and sovereign funds, and the regulatory authorities are under great pressure; The third is long-term development, raising the threshold, eliminating gray and black industries and weak teams, and encouraging large compliance institutions to stay.
SAM:
As I mentioned earlier, the motive is personal speculation. The role of laws and regulations is to guide the standardization of the market and ensure tax collection and sustainable development. No one wants Singapore to be as chaotic as Somalia. In the 2017-2018 ICO era, Singapore made money through the establishment of foundations, and its regulatory experience was earlier than that of Hong Kong. After the market matures, the cake has become bigger, and the leather bag companies and the gray and black industry have affected the business environment, and regulatory intervention has made the business more long-term, attracting traditional financial and compliance funds, and enhancing the value of the industry.
Dongdong Robin:
Both the director and Mr. Sam mentioned that Singapore's regulation is not to eliminate Web3, but to promote standardization after experiencing savage growth. Responding to negative events, maintaining an international image, and attracting compliance funds are the core motivations, which are intended to make the industry healthier and more sustainable.
Q5: The US Genius Act, the Hong Kong stablecoin draft... Recently, there have been frequent regulatory movements in various places. Where do you see as the next "crypto utopia"?
Bai Zhen:
Hong Kong may have an opportunity to attract Singapore's Web3 talent, but it needs a more transparent judicial system, lower costs, and more talent. Web3 can upgrade traditional finance, but Hong Kong missed an early opportunity, prioritizing real estate in the past, and needs to speed up reform. Ten years ago, Hong Kong did not seize the opportunity, such as Fireblocks, Securitize, etc., did not land in Hong Kong. Hong Kong needs to understand the potential of Web3, but with transparent justice, reduced costs, and insufficient English proficiency, Hong Kong needs to attract real talent.
Lawyer Shao Jiadian:
Singapore tightens regulations against regulatory arbitrage, such as registering a company in Singapore but providing services overseas, fearing it may affect reputation. The MAS response document clearly states that digital token services are a high-risk area for anti-money laundering, and cross-border services affect Singapore's image. Legitimate projects are still popular. Singapore, Hong Kong, the United States (with the crypto-friendly president taking office and the SEC optimizing regulations), and the UAE (with aggressive policies) are Web3-friendly regions.
Sam:
As a Hong Kong-based media outlet funded by the Gaofeng Group, we have an obligation to promote Hong Kong's policies. However, in my personal opinion, the compliance costs in Hong Kong are high and suitable for large enterprises. Small projects can consider Europe (1400+ licenses in Poland, 2700-2800 in Europe), Canada (1400+), Australia (400+), or Southeast Asia (single-digit licenses in Malaysia, Thailand). Web3 practitioners are accustomed to a digital nomad lifestyle, with strong cross-border attributes and flexible choices for compliant regions.
McGonagall Meg:
Web3 practitioners are like digital nomads, communicate without borders, and share rules with players from different countries like casinos. I've been to Singapore, where the financial and regulatory advantages are strong, but tighter regulations may eliminate low-margin projects and prioritize compliant products. Malaysia such as Kuala Lumpur is an emerging Web3 gathering place, and an exchange has deployed a team of 300 people. Singapore is still an important choice for Web3, but Hong Kong, the United States, the United Arab Emirates, Malaysia and other places also have their own advantages. The digital nomadic nature of Web3 allows practitioners to choose flexibly, and tighter regulation may be a sign of industry maturity and encourage compliance development.
Thank you for your support tonight! Every Thursday at 8 p.m. Beijing time, "Crypto Bistro" space starts on time, welcome to scan the code to join the listening group to get the latest news of each issue. The tavern is also looking forward to more guests joining, and teachers are welcome to send private messages to the manager!
/END.
Author of this article: Liu Honglin, Zheng Hongde
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Mankiw Research | Five questions and answers on the latest Web3 regulation in Singapore
In the past two days, an article by Mr. Spinach, the head of Pharos Asia Pacific, has attracted the attention of the whole network, giving us such a picture - Singapore's Web3 retreat is coming, and the era of regulatory arbitrage is over... On May 30, 2025, MAS released a response document to the new regulations for digital token service providers DTSP, many of whom are not yet aware of the impact on the Web3 industry in Asia, or the Web3 industry as a whole. Information is also fermenting, and more and more people are beginning to care, what does this mean? 001 Issue Crypto Tavern, the theme focuses on the latest Web3 regulations in Singapore! The tavern invited: Liu Honglin is the founder of Mankiw Law Firm @Honglin_lawyer Sam Techub News COO @ixsamchow Shao Jia Dian Partner Lawyer at Mankun Law Firm @Web3_Jayden Bai Zhen, Head of the Hong Kong Office of Mankun Law Firm @Bai_Zhen_11 Spinach Spinach Pharos Head of Asia-Pacific Strategy @bocaibocai_ Tavern Owner: Meg Makun ( Chengdu ) Builder @MegZhang1986 Dongdong Robin, researcher at Mankun @dongdongRobin McGonagall Meg: Hello everyone and welcome to our crypto bistro in Mankiw, where our slogan is all year round. I'm McGonagall, and today I'm co-managing with Dongdong, also known as Robin, and welcome all of you to our inaugural virtual event, which will focus on the latest regulatory issues in Singapore. We asked Director Liu, the founder of our law firm, to share with us the origin of the crypto tavern. Lawyer Liu Honglin: Okay, thank you, McGonagall. The driving force behind the crypto bistro is actually McGonagall and Dongdong, who are our researchers in Shenzhen and Chengdu, and are also the head of BD. McGonagall is a senior practitioner in the industry and has done a lot of industry-related things in Shenzhen before. They have been thinking about how to bring Mankiw closer to their industry partners and communicate more with each other. So they planned this weekly Thursday event, called Crypto Bistro, which is as relaxed and cozy as a pub, chatting about recent events and exchanging industry trends. In addition to Mankun's "Entrepreneurship Web 3.0" interview program every Wednesday night, this column offers lighter topics. Entrepreneurship means risk and responsibility for many people, which feels a bit heavy, while the tavern format is more relaxed. When they mentioned Thursday, I thought of the "Crazy Thursday" meme, so I connected the two: "Crypto Tavern, Crazy Thursday." Today is the online opening, and as a guest of the tavern, I thank Mage and Dongdong for their efforts. Everyone is welcome to give them a thumbs up, and thank you all for visiting our online tavern! Robin: Thank you, Mr. Honglin, listeners, friends, and guests, good evening! I'm very glad that today is the opening of the tavern. As the hosts, McGonagall and I had a lot of discussions, hoping that in addition to the "Startup Web 3.0" event every Wednesday, we would find a Crazy Thursday with a wider range of topics and a relaxed and diverse Twitter Space program. We hope that the guests invited in each issue can complain and talk about investment and entrepreneurship around the hot spots of Web3, or invite entrepreneurs, investors, KOLs, media, etc. to gather in the tavern like chatting and colliding sparks on the bar. Let's ask McGonagall to share her thoughts. Meg: The legal profession is very rigorous and meticulous, while the Crypto or Web3 sector has many crazy aspects, like two extremes. The crypto tavern perfectly connects this feeling. We can chat a bit more openly on Twitter, so we thought of hosting this event on this channel. We hope everyone joins our Twitter Space. Today we officially begin. Q1: Singapore has always been regarded as a global web3 paradise. Why is it evaluated this way? Let’s share our impressions of Singapore's web3! Sam: Singapore has always been regarded as the Web3 paradise in Asia and even the world, attracting many practitioners to be fascinated. I'll start with a brief remark. In 2021, there was a complete ban on cryptocurrency trading in China, and the SEC is also cracking down on crypto companies. The most attractive thing about Singapore is the zero tax policy, such as Southeast Asia, Singapore, Thailand, Malaysia, Taiwan, Hong Kong and other places, where crypto-related taxes are zero, and there are more compliance licenses issued. Zero tax has a great impact on the cost of enterprises, and the tax rate of ordinary enterprises is often more than ten points, while the profit of the crypto industry may not be so high. In the early days, Singapore's 0% capital gains tax, coupled with its compliance attitude and regulatory environment, attracted many businesses and entrepreneurs. Go to a welcoming place to do a compliant business and make compliant money. This was similar in the early days of Singapore. However, after the wild growth, there are negative events, such as someone taking a license to harvest a messy plate, or involving telemarketing and fraud, which affects the normal financial system. So it's reasonable that this regulatory shift has been traceable and has given the industry a cycle of savage growth and then began to shrink. Lawyer Shao Jiadian: When I was a graduate student in Singapore, I had the impression that Singapore's urban management, social governance, and legal system were like a garden. Their policy is not a one-size-fits-all policy, and it's very organized. The reasons why Singapore is regarded as a Web3 paradise are, firstly, the early introduction of regulatory sandbox and encryption regulations to attract entrepreneurs; the second is tax incentives; Third, as a financial center, Singapore has obvious advantages in talent in the technology and financial industries. Web3 combines technology, the Internet, and finance, and Singapore has a pool of outstanding talents. Coupled with the blend of Chinese and Western cultures, it is no problem to speak Chinese and English, which is suitable for Eastern and Western entrepreneurs. At that time, the United States and Chinese mainland encircled and suppressed the crypto industry, and many project parties chose Singapore, and even some projects insisted on setting up foundations or entities when they were not in Singapore, causing the impression of Web3 paradise. Bai Zhen: I'm in Hong Kong, and you're right. With zero capital gains tax, regulatory sandbox, and a well-established legal system, Singapore has become a Web3 paradise since 2021. MAS is positioned as a crypto hub in Asia, attracting FTX, Three Arrows Capital, etc., allowing enterprises to serve global users without local licenses, and the model of being based in Singapore and having a global business is a regulatory arbitrage advantage. Singapore is very capable, pragmatic, combining the best parts of the West with conservative practices, moving quickly and with a more regulatory style than Hong Kong and the United States. Recent negative events may prompt regulatory changes. Lawyer Liu Honglin: The previous guest was comprehensive, and I would like to add one point. The spinach article mentions that Singapore is going to kill Web3, and I have a slightly different point of view. The overall style of Singapore is to let the bullets fly for a while, and the regulatory policy has been thrown out in the past few years, and it has only recently been noticed. Negative events, such as the Fujian money laundering team and the FTX crash, have affected Singapore's image and sovereign fund investment. Teams, projects, and funds involved in virtual currencies are often related to the gray and black industry or money laundering, which puts great pressure on the regulatory authorities. Raising the bar is a feasible way to eliminate gray and black industries or weak teams, and let institutions with compliant budgets and funds stay. From a positive point of view, this round of operations hopes to retain large institutions, encourage compliance development, and basically refuse to leave small and micro entrepreneurial teams or teams with weak compliance capabilities. This could be a breaking point. Sam adds: I do not fully agree with what Spinach said about the "encirclement". The early barbaric development has evolved into a systematic structure; the market pie has grown larger, and leading institutions consolidate their positions through legislation, excluding small or non-compliant teams. Under the impact of Singapore's shift in attitude towards Web3 in Hong Kong, the growth points are limited, and contraction is a reasonable choice. In 2020, the payment services bill was introduced, and from 2020 to 2021, tens of millions of Singapore dollars were invested to support blockchain, similar to Hong Kong's actions in 2023. The Singapore government investment agency, such as GIC, has also invested in projects like Bitcoin and DC. The tightening of regulations aims to allow compliant funds to enter and enhance the value of the Web3 industry. Although Singapore is small, with a population smaller than Hong Kong, it retains leading firms by contraction. Dong Dong Robin: Thank you for sharing. The reasons why Singapore is considered a Web3 paradise are clear: zero taxes, regulatory sandboxes, talent advantages, and a mix of Chinese and Western cultures make it a hotspot for startups. This regulation is not necessarily as serious as extermination, but for the purpose of standardization, retaining large compliance institutions, and promoting the long-term development of the industry. Q2: The new MAS regulations are called cliff tightening, what is DTSP? To put it simply, what exactly are the new regulations governing? Lawyer Shao Jiadian: In fact, this regulation is not new, it stems from Chapter 9 of the Financial Services and Markets Act 2022, which requires a license for digital token service providers (DTSPs), that is, individuals, partnerships or companies registered or principally engaged in Singapore to provide digital token services to overseas customers. A draft for comments will be released in October 2024, and a response document will be issued on May 30, 2025, with effect from June 30. Those who have not obtained a license must stop providing services overseas. The scope of supervision includes virtual asset and fiat currency exchange, transfer, payment, custody, agency issuance, sales, intermediary services, investment advice, etc. Not for Singapore-based services (with licensing requirements) or non-digital token services. The title may be broad, not to exterminate Web3, but to tighten regulations on cross-border services. This requirement has been in place since 2022, and the scope of application needs to be clarified. Spinach Spinach: I found that friends in the Singapore Web3 community mentioned that the new regulations have a significant impact, and after researching, I found it to be quite serious. There is little discussion on Twitter, so I spent four to five hours reviewing the legal provisions and wrote an article, which unexpectedly caused a stir in the entire community, and was said to be the culprit of the panic. The Financial Services and Markets Act (FSM) was passed in 2022 and is being implemented in phases, coming into effect for DTSP on June 30, 2025. It was announced in 2022, but it seems that everyone forgot about it over the past three years. Attention was only drawn to it after the MAS response document on May 30. My article became popular because many people were uninformed or unclear about the MAS's stance and specific regulations. I have collaborated with MAS over the past two years; the previous government supported innovation, while the new government leans towards AI and is not friendly towards Web3. MAS will bring all individuals and institutions involved in Web3 services under regulation, with enforcement starting on June 30, and the interpretation rights belong to MAS, causing panic due to its ambiguity. Dongdong Robin: Thank you, Mr. Shao and Mr. Spinach. Mr. Shao sorted out the ins and outs of the new regulations in detail, and clarified the regulatory scope and exceptions of DTSP. Mr. Spinach pointed out that the ambiguity of the new regulations and the tough attitude of MAS caused panic in the industry. This gives us a clearer picture of the new rules. Q3: There is a point that everyone is following: will working from home remotely be illegal? Baker McKenzie also inquired about this issue with MAS, can everyone elaborate on this? Spinach spinach: During the consultation in 2024, the MAS was asked by law firms whether remote work is regulated. The MAS responded that employees of overseas companies working from home in Singapore, serving only offshore clients, and whose work falls under the labor contract, do not require a license. However, if they communicate with offshore clients in non-home settings, such as an office, it may be subject to regulation. The MAS provided vague explanations; for instance, it did not clarify whether overseas company executives or directors handling business while vacationing in Singapore counts, leaving loopholes and retaining broad enforcement powers, which caused panic. Meg McG: It sounds like regulation during the pandemic, where substance is more important than form. As long as it's for Singapore citizens or service provision, it might touch upon regulations. Please have Lawyer Shao explain in plain language. Lawyer Shao Jiadian: I read the MAS response document and the questions from Baker McKenzie. MAS responded simply: If you provide digital token services abroad in Singapore, you need to get a license; If you are an employee of an overseas company, you do not need a license to complete the company's internal work. The core is to distinguish between internal services (in-company) and external services (customer-facing). Individuals or independent studios are required to provide services outside of Singapore, such as sales, promotion, investment advice, etc. The presence or absence of a place of business does not affect the decision. KOLs or independent BDs that promote projects may fall under regulation and should be careful not to be construed as investment advice. Business activities during short-term business trips or tourism are not subject to supervision. Sam: The document defines two types of regulatory entities: one is an individual or enterprise operating in a Singapore business premises; Second, a Singapore-registered company provides services overseas. If it is not in the place of business, such as a personal residence, it may circumvent supervision. For example, KOLs doing cryptocurrency content at their own homes may not be considered a place of business. However, MAS is not clearly defined, and it actually looks at behavior. I know a lot of YouTubers in Singapore, such as Xiao Mo, who moved to Singapore due to taxes, they are not in the place of business, and theoretically may not be regulated. Mr. Shaw added: MAS responded that there are no requirements for a place of business, only stating that providing services to overseas clients in Singapore requires a license. An exception is for employees of overseas companies completing internal work for their employers. Long-term operations in Singapore aimed at overseas clients, whether from home or a shared office, may require a license. Business activities during short business trips or vacations are not subject to regulation. Q4: What is the motivation behind the Singapore government? Lawyer Liu Honglin: There are several motives: first, the market is standardized, and after the wild growth, it is necessary to attract compliant funds to ensure taxation and sustainable development; The second is to deal with negative events, such as money laundering and the FTX thunderstorm, which affect Singapore's image and sovereign funds, and the regulatory authorities are under great pressure; The third is long-term development, raising the threshold, eliminating gray and black industries and weak teams, and encouraging large compliance institutions to stay. SAM: As I mentioned earlier, the motive is personal speculation. The role of laws and regulations is to guide the standardization of the market and ensure tax collection and sustainable development. No one wants Singapore to be as chaotic as Somalia. In the 2017-2018 ICO era, Singapore made money through the establishment of foundations, and its regulatory experience was earlier than that of Hong Kong. After the market matures, the cake has become bigger, and the leather bag companies and the gray and black industry have affected the business environment, and regulatory intervention has made the business more long-term, attracting traditional financial and compliance funds, and enhancing the value of the industry. Dongdong Robin: Both the director and Mr. Sam mentioned that Singapore's regulation is not to eliminate Web3, but to promote standardization after experiencing savage growth. Responding to negative events, maintaining an international image, and attracting compliance funds are the core motivations, which are intended to make the industry healthier and more sustainable. Q5: The US Genius Act, the Hong Kong stablecoin draft... Recently, there have been frequent regulatory movements in various places. Where do you see as the next "crypto utopia"? Bai Zhen: Hong Kong may have an opportunity to attract Singapore's Web3 talent, but it needs a more transparent judicial system, lower costs, and more talent. Web3 can upgrade traditional finance, but Hong Kong missed an early opportunity, prioritizing real estate in the past, and needs to speed up reform. Ten years ago, Hong Kong did not seize the opportunity, such as Fireblocks, Securitize, etc., did not land in Hong Kong. Hong Kong needs to understand the potential of Web3, but with transparent justice, reduced costs, and insufficient English proficiency, Hong Kong needs to attract real talent. Lawyer Shao Jiadian: Singapore tightens regulations against regulatory arbitrage, such as registering a company in Singapore but providing services overseas, fearing it may affect reputation. The MAS response document clearly states that digital token services are a high-risk area for anti-money laundering, and cross-border services affect Singapore's image. Legitimate projects are still popular. Singapore, Hong Kong, the United States (with the crypto-friendly president taking office and the SEC optimizing regulations), and the UAE (with aggressive policies) are Web3-friendly regions. Sam: As a Hong Kong-based media outlet funded by the Gaofeng Group, we have an obligation to promote Hong Kong's policies. However, in my personal opinion, the compliance costs in Hong Kong are high and suitable for large enterprises. Small projects can consider Europe (1400+ licenses in Poland, 2700-2800 in Europe), Canada (1400+), Australia (400+), or Southeast Asia (single-digit licenses in Malaysia, Thailand). Web3 practitioners are accustomed to a digital nomad lifestyle, with strong cross-border attributes and flexible choices for compliant regions. McGonagall Meg: Web3 practitioners are like digital nomads, communicate without borders, and share rules with players from different countries like casinos. I've been to Singapore, where the financial and regulatory advantages are strong, but tighter regulations may eliminate low-margin projects and prioritize compliant products. Malaysia such as Kuala Lumpur is an emerging Web3 gathering place, and an exchange has deployed a team of 300 people. Singapore is still an important choice for Web3, but Hong Kong, the United States, the United Arab Emirates, Malaysia and other places also have their own advantages. The digital nomadic nature of Web3 allows practitioners to choose flexibly, and tighter regulation may be a sign of industry maturity and encourage compliance development. Thank you for your support tonight! Every Thursday at 8 p.m. Beijing time, "Crypto Bistro" space starts on time, welcome to scan the code to join the listening group to get the latest news of each issue. The tavern is also looking forward to more guests joining, and teachers are welcome to send private messages to the manager!
/END. Author of this article: Liu Honglin, Zheng Hongde