Singapore’s ousted crypto firms may not find shelter elsewhere

Singapore’s latest bid for unlicensed crypto firms to halt serving overseas customers marks the opening of the extremity for regulatory loopholes successful the blockchain industry.

The May 30 directive from the Monetary Authority of Singapore (MAS) tells crypto firms and individuals offering services overseas to get licensed oregon get out.

To immoderate successful the industry, it whitethorn look similar Singapore is abruptly turning distant from its crypto-friendly stance. But successful reality, the city-state has remained accordant successful its propulsion for compliance. The determination aligns with a planetary crackdown aimed astatine wealth laundering and coercion financing.

“For exchanges inactive playing regulatory pinball — perpetually seeking loopholes to debar licensing requirements — the world is clear: They volition soon find themselves having to relocate to their favourite destination, the moon,” Joshua Chu, a Hong Kong-based lawyer and co-chair of the city’s Web3 association, told Cointelegraph.

“With jurisdictions similar Singapore, Thailand, Dubai, Hong Kong and others tightening oversight and closing gaps, there’s simply nary escaping the planetary propulsion for compliance.”

Exiled successful Singapore, crypto nomads tally retired of road

Singapore has been a favorable hub for regulatory arbitrage successful crypto, acknowledgment to its Payment Services Act (PSA), which requires licensing for firms serving section clients. 

With a comparatively tiny domestic population of astir 6 million, galore crypto companies opted to sidestep licensing by simply avoiding Singaporean customers and focusing connected overseas markets instead, noted YK Pek, CEO and co-founder of the ineligible tech steadfast GVRN, connected X.

The latest MAS deadline is the extremity of crypto firms leveraging Singapore’s licensing rules to service overseas customers. Source: YK Pek

While immoderate construe the caller MAS determination to oust unlicensed crypto firms nether the 2022 Financial Services and Markets Act (FSMA) connected a choky deadline arsenic a crisp argumentation reversal, the regulator said it has maintained a dependable stance.

“MAS’ presumption connected this has been consistently communicated for a fewer years since the archetypal effect to nationalist consultation issued connected 14 February 2022 and successful consequent publications connected 4 October 2024 and 30 May 2025,” the cardinal slope said successful a June 6 statement.

The FSMA states that immoderate concern successful Singapore offering integer token services to clients overseas indispensable beryllium licensed. The instrumentality has not been changed. Rather, the MAS has completed nationalist consultations and is notifying work providers that their unlicensed tenure is over.

Related: South Korea’s caller president volition bolster crypto, but scandals prevail

“I deliberation we request to admit that Singapore is archetypal and foremost a planetary fiscal center, not needfully a crypto one,” Patrick Tan, wide counsel astatine ChainArgos, which was among the respondents to the MAS consultation, told Cointelegraph. 

“Given stricter crypto-asset licensing conditions globally, organizations volition request to bespeak connected what they are seeking to get from a license,” helium added.

Hong Kong offers nary guarantees for Singapore’s crypto outcasts

As firms measurement their adjacent move, speculation is increasing implicit what jurisdictions mightiness go much attractive. Recent developments suggest Singapore is not an outlier but portion of a planetary regulatory shift.

Some companies whitethorn beryllium considering Hong Kong, which has been emerging arsenic a crypto hub lately. Source: Johnny Ng

The Philippines, for instance, present requires each licensed crypto firms to maintain a carnal office successful the country. Thailand has precocious expelled astatine slightest 5 exchanges implicit licensing and wealth laundering concerns, giving investors until June 28 to determination their assets.

One destination that has emerged arsenic an enactment is Hong Kong, Singapore’s determination rival. The 2 jurisdictions are often compared successful the alleged crypto hub race.

Related: Who’s got the charm, currency and codification to beryllium a crypto hub?

Hong Kong is besides being considered by Bybit, 1 of the exchanges precocious expelled from Thailand. A occupation posting by Bybit seeking a licensing counsel successful Hong Kong appeared conscionable days aft Thailand’s Securities and Exchange Commission announced the institution volition beryllium blocked. 

A Bybit spokesperson confirmed to Cointelegraph that Hong Kong is 1 of the jurisdictions nether information for aboriginal licenses, adding that the institution is “working with regulators successful antithetic countries.” The speech is besides hiring for a akin relation successful Malaysia.

Bybit’s hunt for a licensing counsel began close aft Thailand kicked it out. Source: Bybit/LinkedIn

The manufacture is learning that being a “crypto hub” often means facing tighter yet clearer regulatory frameworks. Neither Hong Kong nor Singapore has taken a laissez-faire approach. In fact, Hong Kong moved earlier, ordering each unlicensed exchanges to exit the marketplace successful mid-2024.

Firms looking to pivot to Hong Kong whitethorn find that less companies person succeeded successful securing licenses there. As of June 6, the metropolis had issued lone 10 crypto licenses, compared to 33 integer outgo token licenses approved by MAS nether the PSA.

Hong Kong’s crypto hub ambitions don’t mean licence handouts. Source: Securities and Futures Commission

“Looking ahead, we expect regulatory actions imminently from different large crypto centers including Hong Kong, the European Union with its MiCA [Markets successful Crypto-Assets] framework, the United Kingdom’s evolving crypto laws, South Korea, and Japan — each committed [Financial Action Task Force] members with mature oregon maturing regulatory regimes,” said Chu.

Singapore is among 40 FATF members

Singapore’s FSMA expanded regulatory oversight of crypto work providers, peculiarly those serving overseas clients. The enactment complements the PSA and was introduced successful portion to align with the Financial Action Task Force’s (FATF) mandates connected the Travel Rule and Anti-Money Laundering (AML) standards.

The gait of regulatory alignment accelerated aft the FATF’s February plenary session, which launched nationalist consultations connected improving outgo transparency and addressing the analyzable trails utilized for wealth laundering and sanctions evasion.

“Dubai’s [Virtual Assets Regulatory Authority] released its Rulebook 2.0 soon aft the plenary, imposing stricter AML protocols with a June [19] compliance deadline, reflecting its cautious attack pursuing grey database removal,” Chu pointed out.

For FATF members similar Singapore and Hong Kong, tightening AML standards is expected. But for non-members that autumn abbreviated of compliance, inclusion connected the FATF grey database tin beryllium economically devastating. For example, a study by deliberation vessel Tabadlab estimated that Pakistan’s placement connected the FATF grey database betwixt 2008 and 2019 led to cumulative existent gross home merchandise losses of astir $38 billion.

FATF President Elisa de Anda Madrazo of Mexico has made strengthening standards for virtual assets 1 of the priorities of her two-year term. Source: FATF/YouTube

Aside from precocious tightening their crypto regulations, different communal denominator among Thailand, the Philippines and the United Arab Emirates is their removal from the FATF grey list. Thailand was delisted successful 2013, the UAE successful 2024 and the Philippines successful 2025. According to Chu, jurisdictions that exit the grey database often enactment “extra hard” to enactment disconnected it.

Dubai, the UAE’s emerging fiscal center, has been a magnet for crypto businesses owed to its affable rules and dedicated regulator, but ineligible experts pass against misunderstanding the ecosystem.

“Dubai conscionable got disconnected [the grey list] not excessively agelong agone and is connected the probation list,” Chu said. “So, characters who deliberation they are harmless successful Dubai mightiness beryllium successful a spot of a mendacious consciousness of security.”

This means that the epoch of hopping jurisdictions to dodge regularisation is coming to a close. As crypto firms hunt for their adjacent base, the database of affable but lenient destinations is shrinking, and adjacent the astir welcoming hubs are demanding compliance.

Magazine: Baby boomers worthy $79T are yet getting connected committee with Bitcoin