An article by Pharos Asia Pacific Director Mr. Bocai has attracted the attention of the whole network in the past two days. It paints a picture for us: the big retreat of Singapore's Web3 is coming, and the era of regulatory arbitrage is over...
On May 30, 2025, the Monetary Authority of Singapore (MAS) released a response document on the new regulations for digital token service providers (DTSP). Many people have not yet realized the impact this will have on the Asian Web3 industry, or the entire Web3 industry. Information is also constantly fermenting, and more and more people are beginning to care about what this means.
Issue 001 of Crypto Tavern focuses on the latest regulation of Web3 in Singapore!
The tavern is here:
Liu Honglin, Founder of Mankiw LLP
@Honglin_lawyer
Sam Techub News COO
@ixsamchow
Shao Jiayi, Partner at Mankiw LLP
@Web3_Jayden
Head of the Hong Kong office of Dana-Farber Mankiw LLP
@Bai_Zhen_11
Pharos, Head of Asia Pacific Strategy
@bocaibocai_
Pub owner:
Meg Mankiw (Chengdu) Builder
@MegZhang1986
Dongdong Robin Mankiw Research Fellow
@dongdongRobin
Meg:
Hello everyone, welcome to Mankiw's Crypto Tavern. Our slogan is to be open all year round. I am Meg, and today Dongdong, also known as Robin, and I will be the co-hosts. Welcome everyone to our first online event. The focus tonight is mainly 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:
OK, thank you Mag. The driving force behind Crypto Tavern is actually Mag and Dongdong, who are our researchers in Shenzhen and Chengdu and are also the BD leaders. Mag is a senior practitioner in the industry and has done a lot of industry-related work in Shenzhen before. They have been thinking about how to get Mankiw closer to industry partners and have more exchanges between friends. So they planned this event every Thursday, called Crypto Tavern, which is as relaxed and comfortable as a tavern, where people can talk about recent events and exchange industry trends.
In addition to Mankiw's "Startup Web3.0" interview column every Wednesday night, this column provides more relaxed topics. Entrepreneurship means risks and responsibilities for many people, which is a bit heavy, while the tavern format is more relaxed. When they mentioned Thursday, I thought of the "crazy Thursday" stalk, so I connected it: "Crypto Tavern, Crazy Thursday". Today is the online opening. As a visitor of the tavern, I thank Mag and Dongdong for their promotion. Welcome everyone to like them, thank you for visiting our online tavern!
Dongdong Robin:
Thank you, lawyer Honglin, listeners and guests, good evening! I am very happy that today is the grand opening of the tavern. As the host, Meg and I have discussed a lot. We hope that in addition to the "Startup Web3.0" event every Wednesday, we can find a crazy Thursday with a wider range of topics and a relaxed and diverse Twitter Space program. We hope to invite guests in each episode to talk about Web3 hot topics, investment and entrepreneurship, or without setting specific topics, invite entrepreneurs, investors, KOLs, media, etc. to gather in the tavern and chat like at the bar. Next, please let Meg share her ideas.
Meg:
The lawyer or law firm industry is very rigorous and meticulous, while the Crypto or Web3 track has a lot of crazy sides, like ice and fire. Crypto Tavern just connects this feeling. On Twitter, we can chat more openly, so I thought of doing this event in this channel. I hope everyone will join our Twitter Space.
Today we officially start.
Q1: Singapore has always been regarded as the global web3 paradise. Why is it regarded like this? Please tell us your impression of Singapore’s web3!
Sam:
Singapore has always been regarded as the Web3 paradise in Asia and even the world, attracting many practitioners. Let me briefly talk about it. In 2021, China will completely ban cryptocurrency transactions, and the SEC is also suppressing crypto companies. The most attractive thing about Singapore is its zero tax policy. In Southeast Asia, Singapore, Thailand, Malaysia, Taiwan, Hong Kong and other places, crypto-related taxes are zero, and many compliance licenses are issued. Zero taxation has a great impact on corporate costs. The tax rate of ordinary companies is often more than ten points, and the profits of the crypto industry may not be that high.
In the early days, Singapore implemented 0% capital gains tax, coupled with a compliance attitude and regulatory environment, which attracted many companies and entrepreneurs . Go to a welcoming place to do compliant business and make compliant money. Singapore was similar in the early days. But after the wild growth, negative events occurred, such as someone using the license to issue messy plates for harvesting, or involving telemarketing and fraud, affecting the normal financial system. So this regulatory change is traceable, giving the industry a round of cycles of wild growth and then starting to shrink, which is very reasonable.
Lawyer Shao Jiayi:
I studied in Singapore as a graduate student. I have the impression that Singapore's urban management, social governance, and legal system are like gardening, meticulous and orderly. Their policies are not random, but very organized. The reason why Singapore is regarded as a paradise for Web3 is that it introduced regulatory sandboxes and encryption regulations in the early stage to attract entrepreneurs; second, 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 reserve of excellent talents. In addition, with the fusion of Chinese and Western cultures, it is no problem to speak Chinese or English, which is suitable for entrepreneurs from the East and the West. At that time, the United States and mainland China were besieging the encryption industry, and many project parties chose Singapore. Even some projects that were not in Singapore insisted on setting up foundations or entities to create connections, creating the impression of a Web3 paradise.
White Qin:
I am in Hong Kong, and what the other people just said is very correct. Singapore has become a Web3 paradise since 2021 with its zero capital gains tax, regulatory sandbox, and perfect legal system. MAS positioned it as the Asian crypto hub, attracting FTX, Three Arrows Capital, etc., allowing companies to serve global users without local licenses. The model of being based in Singapore and doing business globally is a regulatory arbitrage advantage. Singapore is very capable, focuses on pragmatism, combines the best parts of the West with conservative practices, acts quickly, and has a more advanced regulatory style than Hong Kong and the United States. Recent negative events may prompt regulatory changes.
Lawyer Liu Honglin:
The previous guest has said it comprehensively, and I would like to add one point. The article mentioned that Singapore is killing Web3, but I have a slightly different view. Singapore's overall style is to let the bullets fly for a while. The regulatory policy was put forward a few years ago, but it has only recently received attention. Negative events, such as the Fujian money laundering team and FTX's thunder, affect Singapore's image and sovereign fund investment. Teams, projects, and funds involving virtual currencies are often related to gray and black industries or money laundering, which puts great pressure on regulatory authorities. Raising the threshold is a feasible way to eliminate gray and black industries or weak teams, and let institutions with compliance budgets and funds stay. From a positive perspective, this round of operations hopes to retain large institutions, encourage compliance development, and basically refuse small and micro entrepreneurial teams or teams with weak compliance capabilities. This may be a breakthrough point.
Sam added:
I don't completely agree with the "encirclement and suppression" mentioned by gambling. From the early barbaric development to the current system, the market pie has become bigger, and the leading institutions have consolidated their position through legislation to exclude small or non-compliant teams. Under the impact of Hong Kong's change in attitude towards Web3, Singapore has limited growth points, and contraction is a reasonable choice. The Payment Services Act has been introduced in 2020, and tens of millions of Singapore dollars will be invested in 2020-2021 to support blockchain, similar to Hong Kong's actions in 2023.
Singapore government investment institutions such as GIC have also invested in Bitcoin, DC and other projects. Tightening regulation is intended to allow compliant funds to enter and enhance the value of the Web3 industry. Although Singapore is small and has a smaller population than Hong Kong, it has allowed the leading companies to remain by shrinking.
Dongdong Robin:
Thank you for sharing. The reasons why Singapore is regarded as a paradise for Web3 are clear: zero taxation, regulatory sandbox, talent advantage and the fusion of Chinese and Western cultures make it a hotbed for entrepreneurship. This regulation is not necessarily as severe as killing off all, but is for standardization, retaining compliant large institutions and promoting the long-term development of the industry.
Q2: The new MAS regulations are called a cliff-like tightening. What is DTSP? In simple terms, what exactly does the new regulation govern?
Lawyer Shao Jiayi:
In fact, this regulation is not a new regulation. It originates from Chapter 9 of the Financial Services and Markets Act of 2022. Digital Token Service Providers (DTSP), that is, individuals, partnerships or companies registered in Singapore or mainly engaged in providing digital token services to overseas customers, need to obtain a license. The draft for comments was released in October 2024, and the response document was released on May 30, 2025, and it will take effect on June 30. Those who have not obtained a license must stop providing services overseas. The scope of supervision includes virtual assets and legal currency exchange, transfer, payment, custody, agency issuance, sales, intermediary services, investment advice, etc. It does not target local services in Singapore (license requirements already exist) or non-digital token services. The title of Mr. Spinach may be broad. It is not to kill Web3, but to tighten supervision 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 circle mentioned that the new regulations have a great impact. After research, I found that they are indeed serious. Few people discussed it on Twitter. I spent four or five hours reading the law and wrote an article. I didn't expect it to cause a sensation in the entire circle and be said to be the culprit of panic. The Financial Services and Markets Act (FSM) will be passed in 2022, in paragraphs, and will take effect on June 30, 2025 for DTSP. 2022 has been announced, but everyone seems to have forgotten it in the past three years. It only attracted attention after MAS responded to the document on May 30. My article became popular because many people are unaware of or unclear about MAS's attitude and specific regulations. I have worked with MAS in the past two years. The previous government supported innovation, and the new government tends to be AI-oriented and unfriendly to Web3. MAS will bring all individuals and institutions involved in Web3 services under supervision, and law enforcement can be carried out from June 30. The right of interpretation belongs to MAS, and the ambiguity causes panic.
Dongdong Robin:
Thank you, Mr. Shao and Mr. Bocai. Mr. Shao sorted out the ins and outs of the new regulations in detail and clarified the regulatory scope and exceptions of DTSP. Mr. Bocai pointed out that the ambiguity of the new regulations and the tough attitude of MAS caused panic in the industry. This gave us a clearer understanding of the new regulations.
Q3: There is a point that everyone is concerned about: Is it illegal to work remotely from home? Baker McKenzie also asked MAS about this issue. Can you tell us more?
Spinach Spinach:
When MAS solicited opinions in 2024, law firms asked whether working from home would be regulated. MAS responded: Employees of overseas companies working from home in Singapore, only serving overseas clients, and the work is part of the employment contract, do not need a license. However, if they communicate with overseas clients in non-home places, such as offices, they may be regulated. MAS's explanation is vague. For example, whether overseas company executives and directors handling business while on vacation in Singapore is considered, MAS did not give a clear answer, plugging loopholes and retaining broad enforcement powers, causing panic.
Meg:
It sounds like the regulation during the pandemic is more about substance than form. As long as it is for Singapore citizens or services are provided, it may violate the regulations. Please explain it in plain language, Mr. Shao.
Lawyer Shao Jiayi:
I read the MAS response document and the questions from Baker McKenzie. MAS simply responded: If you provide digital token services to overseas in Singapore, you need a license; if you are an employee of an overseas company and complete internal work, you do not need a license. The key is to distinguish between internal services (within the company) and external services (to customers). Individuals or independent studios that provide services such as sales, promotion, and investment advice to overseas in Singapore require a license. Whether there is a business premises does not affect the judgment. If KOLs or independent BDs promote projects, they may fall under supervision and must be careful to avoid being regarded as investment advice. Business activities during short-term business trips or travel are not subject to supervision.
Sam:
The document defines two types of regulatory entities: one is individuals or companies operating in Singapore’s business premises; the other is companies registered in Singapore providing services overseas. If they are not in business premises, such as personal residences, they may evade regulation. For example, if a KOL creates cryptocurrency content at home, it may not be considered a business premises. However, MAS has not clearly defined it, and it depends on the actual behavior. I know that many YouTubers are in Singapore, such as Xiao Mo, who moved to Singapore due to taxation. They are not in business premises, so in theory they may not be regulated.
Lawyer Shao Jiayi added:
MAS did not mention the business premises requirements, only saying that a license is required for providing services to foreign countries in Singapore. The exception is when an employee of an overseas company completes internal work for the employer. Long-term operations in Singapore, facing foreign customers, whether at home or in a shared office, may require a license. Businesses during short-term business trips or travel are not subject to regulation.
Q4: What is the motivation behind the Singapore government?
Lawyer Liu Honglin:
There are several motivations: first, market standardization. After wild growth, it is necessary to attract compliant funds to ensure taxation and sustainable development; second, to deal with negative events such as money laundering and FTX collapse, which affect Singapore's image and sovereign funds, and put great pressure on regulatory authorities; third, long-term development, raising the threshold, eliminating gray and black industries and weak teams, and encouraging large compliant institutions to stay.
Sam:
I mentioned earlier that the motivation is a personal guess. The role of regulations is to guide the market to standardize, ensure taxation and sustainable development. No one wants Singapore to be as chaotic as Somalia. In the ICO era of 2017-2018, Singapore made money through the establishment of foundations, and its regulatory experience was earlier than Hong Kong. After the market matured, the pie has become bigger, and shell companies and gray and black industries have affected the business environment. Regulatory intervention allows business to be more long-term, attract traditional financial and compliant funds, and enhance the value of the industry.
Dongdong Robin:
Both the director and teacher Sam mentioned that Singapore's regulation is not to eliminate Web3, but to promote standardization after experiencing wild growth. Responding to negative events, maintaining an international image, and attracting compliant funds are the core motivations, aiming to make the industry healthier and more sustainable.
Q5: The US Genius Act, the Hong Kong Stablecoin Draft...There have been frequent regulatory developments in various places recently. Where do you think will become the "crypto utopia" next?
White Qin:
Hong Kong may take this opportunity to attract Web3 talent from Singapore, but it needs a more transparent judicial system, lower costs, and more talent. Web3 can upgrade traditional finance, but Hong Kong missed the early opportunities and prioritized real estate in the past, so it needs to speed up reforms. Hong Kong did not seize the opportunity ten years ago, such as Fireblocks and Securitize did not land in Hong Kong. Hong Kong needs to understand the potential of Web3, but judicial transparency, lower costs, and English proficiency are no longer enough, and it needs to attract real talent.
Lawyer Shao Jiayi:
Singapore's tightening regulation is aimed at regulatory arbitrage, such as registering a Singapore company but providing services overseas, fearing that it will affect reputation. MAS's response document clearly stated that digital token services are a high-risk area for anti-money laundering, and cross-border services affect Singapore's image. Formal projects are still popular. Singapore, Hong Kong, the United States (crypto president takes office, SEC optimizes regulations), and the UAE (radical policies) are Web3-friendly regions.
Sam:
As a media based in Hong Kong, we are invested by Gaofeng Group and have the obligation to promote Hong Kong policies. But in my opinion, Hong Kong has high compliance costs and is suitable for large enterprises. Small projects can go to Europe (Poland 1400+ licenses, Europe 2700-2800), Canada (1400+), Australia (400+), or Southeast Asia (Malaysia single-digit licenses, Thailand). Web3 practitioners are accustomed to the life of digital nomads, have strong cross-border attributes, and are flexible in choosing compliant regions.
Meg:
Web3 practitioners are like digital nomads, communicating without borders, just like players from different countries sharing rules in a casino. I have been to Singapore, which has strong financial and regulatory advantages, but tightening regulations may eliminate low-profit projects and give priority to compliant products. Malaysia, such as Kuala Lumpur, is an emerging Web3 gathering place, and an exchange has deployed a team of 300 people. Everyone shared different perspectives. 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 nomad characteristics of Web3 allow practitioners to choose flexibly, and tightening regulations may be a signal of the maturity of the industry, encouraging compliance development.
