Singapore's tightening of Web3 regulation is, in essence, a path that all emerging markets must follow before maturing, transitioning from "allowing trial and error" to "establishing order." This article examines the underlying reasons for the policy upgrade in Singapore's regulatory approach to Web3, starting with its regulatory policies.

Over the past few years, Singapore has been one of the most favored "bases" for global cryptocurrency and Web3 companies. With its lenient policies, stable legal system, and open innovation environment, it quickly became a hub for various crypto players, who flocked to Singapore, dubbing it the "Asian Crypto Capital."

However, the tide has turned. Today, Singapore is gradually shifting from its early "innovation-encouraging" model to a more prudent path focused on "risk prevention." Some even wonder if Singapore is about to "eliminate" Web3 altogether.

In the view of Attorney Liu, however, Singapore has simply completed its "initial accumulation" phase and is now moving towards more refined governance.

I. Initial Phase: Welcoming All to Grow the Pie

Singapore was never a "conservative" player from the start. After the introduction of the Payment Services Act (PSA) in 2019, the legal status of Digital Payment Token (DPT) services was clarified, providing a clear licensing pathway for cryptocurrency exchanges and wallet services. Coupled with the Monetary Authority of Singapore's (MAS) consistent encouragement of technological innovation, a wave of Web3 projects began to take root in Singapore, including experimental projects like "Project Ubin" and "Project Orchid," which explored central bank digital currencies and tokenized assets.

This period can be seen as a "first-mover advantage" phase— as long as the compliance baseline was not breached, bold experimentation was encouraged. For many startup teams, this was a rare "window of opportunity." Is Singapore's tightening of Web3 regulation an "eviction" or an "upgrade"?

II. After the Burst: It's Not Just About Making Money Anymore

However, as the industry expanded, some hidden risks began to surface.

In 2022, Three Arrows Capital (3AC) "imploded" in Singapore, followed by the collapse of FTX, in which Temasek had heavily invested. This put immense pressure on Singapore's financial management authorities. After all, in an industry where global compliance is of utmost concern, if a financial hub falters, it is not just a matter of corporate failure but a question of national credibility.

In response, Singapore's regulators quickly took action. On one hand, they strengthened the regulation of cryptocurrency service providers through institutional measures, such as introducing a stricter Financial Services and Markets Act (FSM). On the other hand, they also imposed clear restrictions on retail investment, emphasizing that "cryptocurrency trading should not be like buying lottery tickets."

III. Retail Investors: Sorry, Singapore No Longer Welcomes "Gamblers"

The most typical example is the regulatory details released by MAS at the end of 2023, which effectively "slammed the brakes" on retail investment.

The policy explicitly requires that cryptocurrency service providers must not offer any form of rewards to retail investors, such as cashbacks, airdrops, or trading subsidies. They are also prohibited from providing leverage or allowing credit card funding, which could amplify risks. Furthermore, they are required to assess the risk tolerance of users and set investment caps based on net asset value.

In short, Singapore is seeking rational investors, not crypto gamblers who "go all-in on BTC."

IV. Service Providers: Non-Compliant Ones, Please Leave

By 2025, this trend has become even more evident. In the final policy guidance released by MAS on May 30, it was stipulated that all companies that have not obtained a Digital Token Service Provider (DTSP) license and wish to continue serving overseas clients must "exit the market" by June 30, 2025, at the latest. There is no transition period, and no room for negotiation.

Who can stay? Currently, only a few leading companies have been approved, such as Coinbase, Circle, HashKey, and OKX SG. Another 24 companies are in an exempted status, including Cobo, Matrixport, and Antalpha. These companies have either passed strict anti-money laundering and risk reviews or have demonstrated high compliance and a clean background.

What about the rest? They either need to move to other markets or quickly "go legitimate."

Is Singapore's tightening of Web3 regulation an "eviction" or an "upgrade"?

V. Fund Management Circle Also Tightens: It's Not Just About Money, but Understanding It

In addition to retail investors and service providers, Singapore has not overlooked fund managers.

In traditional finance, Singapore has long been the fund center of the Asia-Pacific region. Now, incorporating virtual assets into the formal fund management process is their next goal.

MAS has stipulated that if you wish to establish a cryptocurrency fund in Singapore, even if you only serve "accredited investors," you must possess the corresponding qualifications. This includes hedging risks, identifying client assets, establishing internal risk control processes, and even having a complete anti-money laundering reporting mechanism.

In other words, the era of starting a fund with "a few crypto bigwigs, a PPT, and a foreign team" is over in Singapore.

In Conclusion: Is It "Suppression" or "Evolution"?

Many people, observing this wave of regulatory upgrades, lament that "Singapore is no longer a Web3 paradise." However, from another perspective, this is actually the normal evolution of regulation—moving from "allowing trial and error" to "establishing order," a path that any emerging market must follow before maturing. Today's Singapore no longer welcomes those who come with a speculative mindset to "exploit projects," but it remains one of the most attractive markets in the world for teams with real technology, strength, and long-term planning.

As MAS Deputy Managing Director Ho Hern Shin said, "We welcome responsible innovation, but we will not tolerate the abuse of trust." In other words—if you want to make a big move in Web3, Singapore's door is still open. But don't expect to come here just to "make a quick buck and leave."

However, some argue that the development of the crypto world and the entire Web3 industry is still in a relatively primitive stage, with its future shape not yet fully formed. Imposing strict regulations on an industry that has not fully developed may not solve all problems but could potentially throw out the baby with the bathwater.

Singapore's tightening of Web3 regulation is, in essence, a path that all emerging markets must follow before maturing, transitioning from "allowing trial and error" to "establishing order." This article examines the underlying reasons for the policy upgrade in Singapore's regulatory approach to Web3, starting with its regulatory policies.

Over the past few years, Singapore has been one of the most favored "bases" for global cryptocurrency and Web3 companies. With its lenient policies, stable legal system, and open innovation environment, it quickly became a hub for various crypto players, who flocked to Singapore, dubbing it the "Asian Crypto Capital."

However, the tide has turned. Today, Singapore is gradually shifting from its early "innovation-encouraging" model to a more prudent path focused on "risk prevention." Some even wonder if Singapore is about to "eliminate" Web3 altogether.

In the view of Attorney Liu, however, Singapore has simply completed its "initial accumulation" phase and is now moving towards more refined governance.

I. Initial Phase: Welcoming All to Grow the Pie

Singapore was never a "conservative" player from the start. After the introduction of the Payment Services Act (PSA) in 2019, the legal status of Digital Payment Token (DPT) services was clarified, providing a clear licensing pathway for cryptocurrency exchanges and wallet services. Coupled with the Monetary Authority of Singapore's (MAS) consistent encouragement of technological innovation, a wave of Web3 projects began to take root in Singapore, including experimental projects like "Project Ubin" and "Project Orchid," which explored central bank digital currencies and tokenized assets.

This period can be seen as a "first-mover advantage" phase— as long as the compliance baseline was not breached, bold experimentation was encouraged. For many startup teams, this was a rare "window of opportunity." Is Singapore's tightening of Web3 regulation an "eviction" or an "upgrade"?

II. After the Burst: It's Not Just About Making Money Anymore

However, as the industry expanded, some hidden risks began to surface.

In 2022, Three Arrows Capital (3AC) "imploded" in Singapore, followed by the collapse of FTX, in which Temasek had heavily invested. This put immense pressure on Singapore's financial management authorities. After all, in an industry where global compliance is of utmost concern, if a financial hub falters, it is not just a matter of corporate failure but a question of national credibility.

In response, Singapore's regulators quickly took action. On one hand, they strengthened the regulation of cryptocurrency service providers through institutional measures, such as introducing a stricter Financial Services and Markets Act (FSM). On the other hand, they also imposed clear restrictions on retail investment, emphasizing that "cryptocurrency trading should not be like buying lottery tickets."

III. Retail Investors: Sorry, Singapore No Longer Welcomes "Gamblers"

The most typical example is the regulatory details released by MAS at the end of 2023, which effectively "slammed the brakes" on retail investment.

The policy explicitly requires that cryptocurrency service providers must not offer any form of rewards to retail investors, such as cashbacks, airdrops, or trading subsidies. They are also prohibited from providing leverage or allowing credit card funding, which could amplify risks. Furthermore, they are required to assess the risk tolerance of users and set investment caps based on net asset value.

In short, Singapore is seeking rational investors, not crypto gamblers who "go all-in on BTC."

IV. Service Providers: Non-Compliant Ones, Please Leave

By 2025, this trend has become even more evident. In the final policy guidance released by MAS on May 30, it was stipulated that all companies that have not obtained a Digital Token Service Provider (DTSP) license and wish to continue serving overseas clients must "exit the market" by June 30, 2025, at the latest. There is no transition period, and no room for negotiation.

Who can stay? Currently, only a few leading companies have been approved, such as Coinbase, Circle, HashKey, and OKX SG. Another 24 companies are in an exempted status, including Cobo, Matrixport, and Antalpha. These companies have either passed strict anti-money laundering and risk reviews or have demonstrated high compliance and a clean background.

What about the rest? They either need to move to other markets or quickly "go legitimate."

Is Singapore's tightening of Web3 regulation an "eviction" or an "upgrade"?

V. Fund Management Circle Also Tightens: It's Not Just About Money, but Understanding It

In addition to retail investors and service providers, Singapore has not overlooked fund managers.

In traditional finance, Singapore has long been the fund center of the Asia-Pacific region. Now, incorporating virtual assets into the formal fund management process is their next goal.

MAS has stipulated that if you wish to establish a cryptocurrency fund in Singapore, even if you only serve "accredited investors," you must possess the corresponding qualifications. This includes hedging risks, identifying client assets, establishing internal risk control processes, and even having a complete anti-money laundering reporting mechanism.

In other words, the era of starting a fund with "a few crypto bigwigs, a PPT, and a foreign team" is over in Singapore.

In Conclusion: Is It "Suppression" or "Evolution"?

Many people, observing this wave of regulatory upgrades, lament that "Singapore is no longer a Web3 paradise." However, from another perspective, this is actually the normal evolution of regulation—moving from "allowing trial and error" to "establishing order," a path that any emerging market must follow before maturing. Today's Singapore no longer welcomes those who come with a speculative mindset to "exploit projects," but it remains one of the most attractive markets in the world for teams with real technology, strength, and long-term planning.

As MAS Deputy Managing Director Ho Hern Shin said, "We welcome responsible innovation, but we will not tolerate the abuse of trust." In other words—if you want to make a big move in Web3, Singapore's door is still open. But don't expect to come here just to "make a quick buck and leave."

However, some argue that the development of the crypto world and the entire Web3 industry is still in a relatively primitive stage, with its future shape not yet fully formed. Imposing strict regulations on an industry that has not fully developed may not solve all problems but could potentially throw out the baby with the bathwater.