Singapore's new Web3 regulatory rules have caused a stir in the industry, forcing practitioners to make new choices.

On June 30, 2025, the Web3 industry in Singapore will reach an important turning point. According to the latest revised Article 137 of the Financial Services and Markets Act (FSMA), all digital token service providers with a place of business in Singapore, regardless of whether their customer base is located within Singapore, must obtain a Digital Token Service Provider (DTSP) license. Otherwise, they will face severe criminal penalties.

The Monetary Authority of Singapore (MAS) clearly stated in a regulatory response document released on May 30 that institutions that have not obtained licenses by the deadline must immediately cease overseas operations, and the status of applications cannot be used as a basis for legal operations. This wording is interpreted by industry insiders as one of the strictest cryptocurrency regulatory policies in history.

To gain a deeper understanding of the key points in the FSMA document and its impact on the industry, we interviewed several legal experts and Web3 practitioners in Singapore, attempting to restore the real situation of local Web3 practitioners and discuss their views on the regulatory changes in Singapore.

Analysis of Key Points of the Bill

In our in-depth discussions with senior lawyers, we identified several legislative contents worth noting:

1. The FSMA is not just a supplementary regulation for overseas business, but a comprehensive upgrade that covers both domestic and foreign operations. This means that as long as there is a place of business or registered company in Singapore, regardless of where the business is directed, compliance with FSMA regulations is required.

2. The regulatory focus has shifted from institutional licensing to individual scrutiny. The new regulations allow MAS to directly oversee high-risk individuals, including non-executive freelancers, remote developers, consultants, etc., significantly raising the threshold for individual practitioners.

3. The compliance requirements of the FSMA far exceed those of the previous Payment Services Act (PSA). Even companies that already hold a PSA license need to resubmit supplementary materials to meet the FSMA requirements. Applying for a DTSP license not only requires an initial capital of 250,000 SGD and a resident compliance officer, but also necessitates the establishment of an independent auditing mechanism, regular submission of compliance reports, and adherence to anti-money laundering and counter-terrorism financing requirements.

The Real Reactions of Web3 Practitioners in Singapore

In the face of this tightening regulatory situation, Web3 practitioners in Singapore have shown different reactions and attitudes:

1. The founder of a startup project stated that the new regulatory environment poses a huge challenge for small teams. They may have to consider relocating from Singapore due to the high compliance costs.

2. An experienced OTC trader believes that the approach of the Singapore government is pragmatic. They hope to use these regulations to filter out truly valuable enterprises while deterring some non-compliant practitioners.

3. A practitioner with many years of experience in the Web3 AI field in Singapore pointed out that the recent tightening of regulations is a necessary measure taken by the Singapore government to maintain the healthy development of the industry. He noted that many practitioners have started to be more cautious and reduce discussions on Web3-related topics in public.

4. An entrepreneur who has lived in Singapore for nearly 20 years stated that the regulatory policies in Singapore have not undergone fundamental changes, but rather further clarification and refinement of the existing framework. He believes that Web3 remains an important component of Singapore's national strategy.

5. Another founder of an AI startup believes that this regulatory change mainly affects companies and projects with strong financial attributes, while having limited impact on small, technology-oriented teams. He still has confidence in the entrepreneurial environment in Singapore, especially for overseas Chinese.

Conclusion

The recent tightening of regulations reflects Singapore's self-adjustment as an international financial center, rather than a complete rejection of the Web3 industry. Practitioners are weighing whether to accept stricter regulations in exchange for long-term policy stability or to turn to other seemingly friendlier markets that may carry more uncertainty. In any case, Singapore's development in the Web3 field remains worthy of continued attention.