“`html
Singapore’s recent mandate for unlicensed crypto enterprises to cease serving international clients signifies the onset of the termination of regulatory gaps in the blockchain sector.
The May 30 notice from the Monetary Authority of Singapore (MAS) advises crypto businesses and individuals providing services globally to either obtain a license or exit.
For some within the sector, it might seem as if Singapore is abruptly distancing itself from its crypto-accommodating position. However, the city-state has consistently pushed for compliance. This action aligns with a worldwide initiative targeting money laundering and financing of terrorism.
“For exchanges still navigating regulatory challenges — perpetually looking for loopholes to bypass licensing obligations — the truth is evident: They will soon have to relocate to their preferred spot, the moon,” stated Joshua Chu, a lawyer based in Hong Kong and co-chair of the local Web3 association, in conversation with Cointelegraph.
“With regions such as Singapore, Thailand, Dubai, Hong Kong, and others tightening regulations and closing loopholes, there’s truly no evading the worldwide drive for compliance.”
Displaced in Singapore, crypto wanderers face limitations
Singapore has served as an advantageous center for regulatory arbitrage in crypto, due to its Payment Services Act (PSA), which mandates licensing for firms catering to local clientele.
Given its relatively small domestic population of around 6 million, numerous crypto firms chose to bypass licensing by simply avoiding Singaporean patrons and concentrating on foreign markets instead, observed YK Pek, CEO and co-founder of the legal tech company GVRN, on X.
While some view the latest MAS initiative to expel unlicensed crypto firms under the 2022 Financial Services and Markets Act (FSMA) with a strict timeline as a significant policy shift, the regulator stated it has upheld a consistent approach.
“MAS’ stance on this has remained clearly articulated for several years since the initial response to public consultation released on 14 February 2022 and in subsequent communications on 4 October 2024 and 30 May 2025,” the central bank announced in a statement on June 6.
The FSMA stipulates that any entity in Singapore providing digital token services to international clients must be licensed. The legislation has not been modified. Instead, the MAS has completed public consultations and is informing service providers that their period of operating unlicensed is concluded.
Related: South Korea’s new president aims to boost crypto, amid ongoing scandals
“We must acknowledge that Singapore is primarily a global financial hub, not exclusively a crypto one,” stated Patrick Tan, chief legal officer at ChainArgos, which participated in the MAS consultation, while speaking to Cointelegraph.
“Considering the stricter global conditions for crypto-asset licensing, firms need to evaluate what they hope to achieve by obtaining a license,” he further noted.
Hong Kong provides no assurances for Singapore’s crypto exiles
As companies deliberate their next steps, speculation is escalating regarding which jurisdictions may become more appealing. Recent occurrences suggest that Singapore is not isolated but part of an international regulatory transformation.
The Philippines, for example, now mandates all licensed crypto firms to have a physical presence in the nation. Thailand has more recently expelled several exchanges due to licensing and money laundering issues, permitting investors until June 28 to relocate their assets.
One location that has arisen as a viable option is Hong Kong, Singapore’s competitor in the region. The two territories are often compared in the race for the title of crypto hub.
Related: Who possesses the allure, capital, and code to be a leading crypto hub?
Hong Kong is also under consideration by Bybit, one of the exchanges recently ejected from Thailand. A job listing by Bybit seeking a licensing counsel in Hong Kong emerged shortly after Thailand’s Securities and Exchange Commission announced the prohibiting of the firm.
A Bybit representative confirmed to Cointelegraph that Hong Kong is among the locations being considered for future licenses, stating that the enterprise is “engaging with regulators in various nations.” The exchange is also recruiting for a similar position in Malaysia.
“`
The sector is discovering that being labeled a “crypto hub” frequently entails navigating stricter yet more transparent regulatory frameworks. Neither Hong Kong nor Singapore has adopted a hands-off policy. In actuality, Hong Kong acted sooner, mandating all unlicensed exchanges to vacate the market by mid-2024.
Companies aspiring to shift to Hong Kong may observe that fewer enterprises have successfully obtained licenses there. As of June 6, the city had granted only 10 crypto licenses, in contrast to 33 digital payment token licenses authorized by MAS under the PSA.
“Looking forward, we foresee regulatory measures imminent from other prominent crypto hubs including Hong Kong, the European Union with its MiCA [Markets in Crypto-Assets] framework, the United Kingdom’s evolving crypto legislation, South Korea, and Japan — all committed [Financial Action Task Force] members with advanced or developing regulatory frameworks,” remarked Chu.
Singapore is one of 40 FATF members
Singapore’s FSMA broadened regulatory oversight for crypto service providers, particularly those catering to international clients. The act complements the PSA and was introduced partially to align with the Financial Action Task Force’s (FATF) requirements on the Travel Rule and Anti-Money Laundering (AML) standards.
The speed of regulatory synchronization increased following the FATF’s February plenary meeting, which initiated public consultations on enhancing payment transparency and tackling the intricate trails employed for money laundering and evading sanctions.
“Dubai’s [Virtual Assets Regulatory Authority] introduced its Rulebook 2.0 shortly after the plenary, enforcing stricter AML protocols with a June [19] compliance deadline, reflecting its cautious stance post-gray list removal,” noted Chu.
For FATF participants like Singapore and Hong Kong, enhancing AML criteria is anticipated. However, for non-members that fail to meet compliance, being placed on the FATF gray list can lead to severe economic repercussions. For instance, a report by think tank Tabadlab estimated that Pakistan’s presence on the FATF gray list from 2008 to 2019 resulted in cumulative real GDP losses of approximately $38 billion.
FATF President Elisa de Anda Madrazo from Mexico has prioritized strengthening standards for virtual assets during her two-year tenure. Source: FATF/YouTube
In addition to recently tightening their crypto regulations, another common element among Thailand, the Philippines, and the United Arab Emirates is their removal from the FATF gray list. Thailand was delisted in 2013, the UAE in 2024, and the Philippines in 2025. According to Chu, jurisdictions that exit the gray list often strive “extra hard” to maintain their status.
Dubai, the UAE’s burgeoning financial hub, has attracted numerous crypto enterprises due to its favorable regulations and dedicated oversight, but legal experts caution against misconceptions regarding the ecosystem.
“Dubai just recently got off [the gray list] and is currently on the probationary list,” Chu emphasized. “Thus, individuals who believe they are secure in Dubai may be experiencing a sense of false security.”
This indicates that the time for moving between jurisdictions to evade regulation is drawing to a close. As crypto companies seek their next location, the roster of accommodating yet lenient destinations is diminishing, and even the most hospitable hubs are enforcing compliance rigorously.
Magazine: Baby boomers with $79T are finally embracing Bitcoin
