Singapore's Web3 Regulations Tighten: Challenges and Opportunities from Practitioners' Perspectives

On June 30, 2025, Singapore's Web3 industry will迎来 an important turning point. According to Article 137 of the Financial Services and Markets Act (FSMA), all individuals or companies operating in Singapore and providing services related to digital tokens, regardless of whether their clients are local or not, must obtain a Digital Token Service Provider (DTSP) license, or they will face legal liabilities.

The Monetary Authority of Singapore (MAS) clearly stated in a document released at the end of May that institutions that have not obtained a license must immediately cease their overseas operations, and the status of applications will not be considered a legal basis. This strict measure has been interpreted by many as "the strictest crypto regulation in history."

To gain a deeper understanding of the overlooked key points in the FSMA document and the actual situation of Web3 practitioners in Singapore, we interviewed professional lawyers and several industry professionals working in Singapore.

1. Analysis of the Core Points of the Bill

Through in-depth communication with experts in the digital economy, we discovered several noteworthy aspects of the following bills:

1. FSMA is a comprehensive upgraded regulatory framework applicable to both domestic and foreign operations.

The FSMA is not just a supplementary regulation for overseas operations, but a comprehensive framework law. Regardless of whether the business is aimed at domestic or overseas markets, as long as there is a business presence or registered company in Singapore, compliance with the FSMA is mandatory. This marks the official launch of comprehensive regulation by MAS for local Web3 practitioners.

2. The regulatory focus shifts from institutions to individuals.

The FSMA has introduced a regulatory mechanism for individuals, allowing the MAS to directly intervene and isolate high-risk individuals. This means that freelancers, remote developers, consultants, or opinion leaders who provide relevant services in Singapore, regardless of their management status, may become subjects of regulation. This significantly raises the threshold for individual practitioners.

3. FSMA compliance requirements far exceed those of PSA

Even companies that already hold a PSA license must resubmit materials to meet 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 audit mechanism, regular submission of compliance reports, and adherence to management requirements for anti-money laundering and counter-terrorism financing.

2. The Real Voices of Web3 Practitioners in Singapore

We interviewed five Web3 practitioners working in Singapore, and their experiences and perspectives reflect the real picture of policy implementation:

1. The founder of the tokenized operation project, Chari, believes that Singapore may no longer be suitable for the development of startup projects, but small businesses always have a way to survive. They are considering the possibility of moving away from Singapore in the future.

2. OTC traders believe that the regulatory environment in Singapore is pragmatic. He stated that truly capable companies would not be anxious about the new regulations, and that the tightening of regulations is more to sound the alarm for some non-compliant groups.

3. John, a practitioner in the Web3 AI field, emphasized that Singapore has always had a pragmatic governance style. He noted that more and more freelancers are starting to work from home, avoiding public discussions on Web3 topics to reduce risks.

4. Neil, the founder of Reddio who has lived in Singapore for nearly 20 years, believes that the regulatory policies in Singapore have not undergone a drastic shift, but rather a clarification and refinement of the existing framework. He stated that Web3 remains a part of Singapore's national strategy, with the government promoting ecological development in various ways.

5. The founder of GM Agents, Chess, believes that the current regulatory changes mainly target companies with strong financial attributes, which have a limited impact on small teams. He remains optimistic about the entrepreneurial environment in Singapore, especially for overseas Chinese.

Conclusion

Singapore's recent tightening of regulations can be seen as a self-correction of its status as an international financial center, rather than a push against the Web3 industry. Practitioners are weighing whether to accept stricter regulations in exchange for long-term policy certainty or to turn to other markets that seem friendlier but carry higher uncertainties. Regardless, the Web3 industry in Singapore is facing significant turning points and challenges.