Singapore's Web3 Regulation Tightens: A Real Perspective from Practitioners

On June 30, 2025, the Web3 industry in Singapore will reach an important turning point. According to Article 137 of the Financial Services and Markets Act (FSMA), all digital token-related service providers with a place of business in Singapore, regardless of whether their clients are local, must obtain a Digital Token Service Provider (DTSP) license. Otherwise, they will face criminal liability.

The Monetary Authority of Singapore (MAS) clearly stated in the regulatory document released in May that institutions that have not obtained a license by the deadline must immediately cease their overseas operations, and the status of pending applications will not be considered a legitimate basis. This measure has been interpreted by many as the strictest cryptocurrency regulatory policy to date.

In order to gain a deeper understanding of the impact of this bill, we consulted professional lawyers and interviewed five Web3 practitioners working in Singapore to gather their views on this regulatory change.

1. Key Points of the Bill

In our discussions with experts in digital economy law, we discovered several noteworthy aspects of the following bills:

1. FSMA is a comprehensive upgraded regulatory framework applicable to all financial service entities within and outside of Singapore.

2. The regulatory focus has shifted from institutional licensing to individual review, which means that even freelancers, remote developers, consultants, or opinion leaders who are not part of the management, as long as they are engaged in related services in Singapore, may become subjects of regulation.

3. The compliance requirements of the FSMA far exceed those of the previous PSA, and even companies that already hold a PSA license need to resubmit materials to meet the new requirements.

II. The Real Reactions of Web3 Practitioners in Singapore

Despite the tightening regulation putting pressure on Web3 practitioners, the actual situation presents a diverse landscape. From our interviews, we heard different voices:

1. The founder of the tokenized operation project stated that the new regulatory environment has put significant pressure on small startups, and they are considering relocating from Singapore.

2. An OTC trading practitioner believes that Singapore's regulatory policies are pragmatic, mainly targeting those irregular operations and shell companies. He thinks that truly capable enterprises will not feel anxious due to the new regulations.

3. A senior practitioner in the Web3 and AI fields pointed out that the recent tightening of regulations is a necessary measure by the Singapore government to ensure the healthy development of the ecosystem. He noted that many freelancers are becoming more cautious and avoiding discussions on Web3-related topics in public.

4. Entrepreneurs who have lived in Singapore for nearly 20 years believe that the regulatory policies in Singapore have not experienced a drastic shift, but rather a clarification and refinement of the existing framework. He emphasized that Web3 remains an important component of Singapore's national strategy.

5. A founder of an AI startup stated that the current regulatory changes mainly target companies with strong financial attributes, having a limited impact on small tech teams. He believes that Singapore remains a suitable place for innovation and entrepreneurship.

Conclusion

The recent tightening of regulations in Singapore can be viewed as a self-adjustment in its role as an international financial center, rather than a complete rejection of the Web3 industry. Web3 practitioners are weighing whether to accept stricter regulations in exchange for long-term policy stability or to shift towards other seemingly more friendly markets that may carry greater uncertainties. This choice will influence the future development direction of Singapore's Web3 industry.