On May 30, the Monetary Authority of Singapore (MAS) officially released its final response paper regarding the Digital Token Service Provider (DTSP) licensing regime. Initially, the policy did not draw much attention until a few days later when a WeChat public article caused a stir, making the industry acutely aware of its implications. The paper explicitly states that all projects operating in Singapore without a license must cease their activities by June 30. This has caused considerable anxiety among crypto practitioners in Singapore.

What impact will this new regulation have on the crypto space? Are we on the brink of another "The Wandering Earth"-style migration wave? On the evening of June 12, BlockBeats specially invited Christopher Liu, Chief Compliance Officer of Matrixport; Chen Wu, CEO of EX.IO; Ye Su, Founding Partner of ArkStream Capital; and Valentina, BD Director of Herring Global, to discuss the topic "The End of Web3 Paradise? What Does Singapore’s DTSP Act Mean for the Industry?" The panel delved into the regulatory logic behind the act and its profound impact on the industry's future development.

BlockBeats: Tonight, we’ve invited several seasoned guests from front-line institutions, including compliance VC firms and trading platforms, to explore the intentions behind Singapore’s new policy and its short-term and long-term effects on the Web3 industry in the region. Let's start by having our guests briefly introduce themselves.

Ye Su: Thank you for the invitation. I’m Ye Su, a Partner at ArkStream Capital. We are a crypto fund established in 2020, primarily focusing on early-stage investments and liquidity strategies. Over the past five years, we’ve invested in over 100 projects, including recently launched ones such as Space and Time, Kernel, and Particle Network. We also maintain close collaborations with the organizations of the esteemed guests here today.

Although I don't currently reside in Singapore, half of our LPs are based there, many of whom are licensed institutions. Around 20% of our sixth fund is allocated to Singapore. Personally, I lived in Singapore for more than a year in 2022, but due to the regulatory framework and overall lifestyle atmosphere, I eventually chose not to stay permanently. I’m delighted to be here today to unpack this topic with everyone, thank you.

Chen Wu: Hello everyone, I’m Chen Wu, the Founder and CEO of EX.IO, a Hong Kong-based compliant crypto exchange. We are one of the currently licensed exchanges in Hong Kong and the only one identified as a key enterprise introduced by the Hong Kong government. We come from a traditional finance background and are committed to developing in a compliant manner.

Although we currently do not have an official presence in Singapore, before deciding to apply for a Hong Kong license, we conducted research on compliance pathways in various regions around the world, with Singapore naturally being one of the key areas of focus. The decision to ultimately choose Hong Kong was based on an overall assessment of its history, economic environment, and policy landscape. I’ll also share our thought process behind this decision later.

Taking this opportunity, I’d also like to introduce an upcoming four-city tour we are organizing in Mainland China, in collaboration with several institutions, including CTO Lab (City University of Hong Kong) and BlockBeats, the host of this event. The tour will focus on talent cultivation, project incubation, and ecosystem development. This initiative is part of our corporate social responsibility efforts, and we aim to encourage more universities and young people to engage in the Web3 industry. Thank you, everyone.

Christopher Liu: Hello, everyone. I’m Chris, the Chief Compliance Officer of Matrixport Group. Matrixport is a crypto asset platform that spans multiple business verticals such as OTC and custody, which many of you may already be familiar with. Personally, I am based in Singapore and have previously worked in banking, payments, and regulatory bodies. I’ve been in the crypto industry for three and a half years now. The views I express today are my own and do not represent the stance of my company. Thank you for the invitation, and I look forward to engaging with everyone today.

Valentina: Hi, everyone. I’m Valentina from Herring Global. Our entire team started out in Singapore, including our traders and founders, so from the very beginning, compliance has been our foundational route. After the DTSP regulations were rolled out, our institution was actually included on the official “license exemption list.” As a liquidity provider, we offer liquidity solutions across both centralized and decentralized venues, serving project teams and VC firms. We also collaborate with the institution led by Professor Ye Su. Personally, I’ve worked on DeFi projects in the past, and I’m now with Herring Global. I’m delighted to discuss the latest developments in Singapore’s compliance pathways with all of you today.

BlockBeats: The new DTSP regulations in Singapore seem to have triggered quite a strong reaction in public discourse. How do you and the people around you perceive this? Is it really as serious as it seems?

Christopher Liu: Sure. In fact, the Financial Services and Markets Act (FSA) isn’t entirely new—it has been in the works since 2020. Even though the enforcement timeline has only recently been clarified, industry insiders in Singapore have been aware for quite some time that this regulatory framework was on its way. The key background here traces back to the FATF (Financial Action Task Force) requirements in 2019, which stated that member states should establish regulatory mechanisms encompassing both locally licensed institutions and companies conducting cross-border business from local jurisdictions. As a result, Singapore issued relevant consultation papers in 2020, initially called the Omnibus Act, which officially evolved into the Financial Services and Markets Act (FSA) in 2022.

So, the implementation of this policy is not a sudden move, and the industry has not been caught off guard. MAS (Monetary Authority of Singapore) engaged in discussions and consultations with industry organizations before and after the policy was announced. Regarding the question, "Is it really that serious?"—if you only focus on the Chinese community or some media reports, the wording might seem alarmist, as if Singapore intends to completely cut off external business. However, after MAS released its document on May 30, it promptly clarified that institutions with existing licenses can still conduct international business and onboard users.

The entities truly affected are those conducting international business without a license. MAS also mentioned that they have identified some affected platforms and are assisting them in transitioning, such as applying for licenses. Overall, MAS has not adopted a "one-size-fits-all" approach.

Valentina: Our organization is currently operating under an "exempt status." From the very beginning, we have committed to a compliance-first approach and maintained continuous communication with the regulators. Presently, MAS has granted us an exemption during their evaluation process, but this does not mean we can operate without a license indefinitely. The exempt status could ultimately lead to one of three possible outcomes:

1. Obtaining a formal license, which might not necessarily be a DTSP (Digital Token Service Provider) license but possibly another type.

2. The company decides to exit the business and no longer applies for a license.

3. MAS identifies issues during an annual review and requires the business to cease operations.

At the initial phase of this policy announcement, there was indeed some panic within the industry, especially among certain exchanges and custodial service providers. However, for institutions already on a compliance pathway and maintaining consistent communication with MAS, the actual impact has been relatively minimal. The core of Singapore’s regulatory approach is not to stifle innovation but to ensure that technological exploration occurs within a compliant framework. MAS continues to support the development of emerging technologies like DeFi, stablecoins, and AI, but the prerequisite is the establishment of anti-money laundering mechanisms and the enforcement of KYC/KYB requirements. Thus, the “severity” of the policy largely depends on whether a company genuinely regards compliance as a key part of its development strategy.

Chen Wu: Just to clarify, we are a Hong Kong-licensed exchange, not a virtual asset trading platform based in Singapore. To be honest, when we saw the Chinese community expressing fear towards Singapore's policy changes, we did experience a bit of “schadenfreude.” At the time, we also noticed some KOLs claiming that Singapore might no longer be an ideal hub for Web3 startups, with mentions of returning to Hong Kong, Dubai, or other regions.

There has also been significant comparison between Hong Kong’s VATP (Virtual Asset Trading Platform) license and Singapore’s DTSP framework. Some argue that VATP is more lenient and retail-friendly. However, after connecting offline with many projects deeply rooted in Singapore, we found that very few are genuinely planning to leave. Most still hope to continue developing locally. Ultimately, this is because while DTSP has been introduced, its regulatory details, requirements, and scope of application remain unclear. For instance, questions like "Who can apply?", "Who qualifies for exemptions?" and "Which business activities are restricted?" still lack definitive standards.

We've observed discussions within the community, such as whether DeFi projects face restrictions, whether they can still operate in Singapore, and whether regulations can be bypassed. Interpretations vary widely among different parties. This has further affirmed my decision to choose Hong Kong in the first place. Although Hong Kong's compliance pathway is stringent, at least its policies are clear and its thresholds well-defined. The VATP license guidelines we applied for are nearly 300 pages long—detailed and highly actionable. This reflects a notable distinction: in Dubai, for instance, the regulatory framework is also continuously being updated. While not very lengthy, it undergoes iterative optimization every year, improving clarity and transparency.

In contrast, while Singapore announced its policies three years in advance, it only released specific guidelines a month before the final deadline, leaving significant uncertainties. This ambiguity could impact not only whether existing projects stay but also whether new projects dare to enter and whether capital is willing to invest. Therefore, I believe the real impact of DTSP may not lie in "who gets driven away" but rather in "who can still be attracted." This issue, however, currently lacks sufficient discussion within the community. Later, I'm also very interested in hearing Mr. Su Ye's perspective on this from a VC angle.

Christopher Liu: I'd like to add a point. Many people, especially some online KOLs, assumed upon seeing the release of the DTSP framework that this represents Singapore's primary regulatory logic for the entire industry. But that's not actually the case.

The primary legislation currently applicable to the crypto industry in Singapore is actually the Payment Services Act (PSA). Over the past two years of our communication with MAS (Monetary Authority of Singapore), regulators have repeatedly emphasized that if you plan to offer services in Singapore such as exchanges, custody, OTC, etc., you should apply for a PSA license, specifically the MPI (Major Payment Institution) category. The introduction of DTSP is aimed at addressing the gray areas not covered by PSA—for example, entities registered in Singapore that mainly serve overseas customers but do not hold PSA licenses.

The underlying reason for DTSP’s introduction is FATF (Financial Action Task Force) requirements on anti-money laundering (AML). The expansion of the regulatory framework is intended to cover teams previously not under PSA oversight but operating international businesses. However, if you're a practitioner intending to operate Web3 services long-term in Singapore, such as OTC, custody, or trading platforms, the license you need to apply for is still the MPI license under PSA, not DTSP.

When MAS issued the DTSP document, they explicitly stated that there would be no "dual regulation"—they would not require the same organization to apply for multiple licenses simultaneously. If you already hold a PSA license or are in the compliance application process, DTSP's impact on you is minimal.

Rhythm BlockBeats: Mr. Ye Su, you previously referred to this policy as "regulatory performance" on Twitter. Could you elaborate on your perspective?

Ye Su: When I posted that tweet, it was because I noticed some people reacting very strongly to this policy, using terms like "great purge." When I introduced the concept of "regulatory dramaturgy," it wasn’t meant as criticism; rather, I wanted everyone to look at this from a different perspective: this is part of a strategic rhythm orchestrated by the government.

Let me use an analogy—similar to how a project might conduct a "farming campaign," which also follows a roadmap. In the first phase, broad user participation is encouraged; in the second phase, participants are required to complete KYC and AML procedures; and in the third phase, the focus shifts to retaining quality users to promote ecosystem growth. I believe Singapore’s regulatory evolution for Web3 follows a similar trajectory.

Since 2017, Singapore has encouraged all Web3 businesses to establish themselves locally—that was the "open phase." By 2021, it transitioned into the "filtering phase," emphasizing compliance. Now, with the formal enactment of DTSP (Digital Token Service Providers), Singapore enters the "closing phase," meaning they are now only welcoming genuinely compliant and capable institutions to operate long-term.

Looking at the scope of the new legislation, it is extremely broad, encompassing areas such as token issuance, custody, trading, payments, matchmaking, staking, and even considering remote work as part of operational activities. The only exemptions are for pure technical consulting and non-transactional promotional advertising. I also reviewed two similar policy evolution paths in Singapore: one being the 2019 payment industry overhaul, where it was initially announced that 90% of payment institutions would be phased out, but a three-year buffer was provided, and eventually roughly 40% were approved; and the second being the 2023 family office tax exemption policy, where the exemption threshold was raised from 5 million SGD to 20 million SGD. Again, this wasn’t done abruptly—it included a transition period.

Essentially, the goals of these policies are highly consistent: to retain compliant enterprises committed to real business and to eliminate those exploiting regulatory loopholes for gray-market arbitrage. On the surface, it appears to be "strict regulation," but in practice, it’s "selective welcoming." That’s why I describe it as a form of "regulatory performance," representing Singapore’s proactive stance in the global compliance narrative. From this perspective, it is a strategic articulation that aligns with their ambition to position themselves as a "global compliance innovation hub."

Ye Su’s Tweet

Rhythm BlockBeats: Why has Singapore introduced this directive? How do you view the medium-to-long-term impact of this new regulation on the development of the Web3 sector in Singapore?

Christopher Liu: In terms of regulatory clarity, Singapore is actually one of the earliest countries in the Asia-Pacific region to establish a licensing framework for the crypto industry. Since accepting PSA licenses in 2020, it has developed a relatively mature regulatory logic.

The introduction of the DTSP is an extension of the existing framework, making the overall structure more comprehensive. MAS has also made it clear that institutions that already hold a PSA or are on a compliance pathway can continue to provide services to both local and overseas clients. For institutions with an existing compliance setup, this acts as a further "confirmation."

Moreover, MAS has recently expanded the regulatory definition of "digital currencies" and has allowed formal applications for custody business licenses since last year. These details indicate that MAS is not suppressing the industry but rather gradually refining regulatory boundaries, striking a balance between "preventing retail investors from blindly speculating on cryptocurrencies" and "supporting industry growth." In the medium to long term, Singapore will continue to serve as a regulatory hub for Web3, and under this framework, hopes to encourage compliant platforms to use the country as a base to serve the broader Asia-Pacific market.

Valentina: Overall, Singapore has consistently sought to strike a balance between "encouraging innovation" and "ensuring financial stability." The introduction of the new DTSP regulations fills some of the regulatory gaps that the original PSA could not cover, especially in light of the frequent crises in the industry in recent years where certain blind spots in regulation became apparent.

In the medium to long term, this policy might lead to several impacts: First, it raises the threshold for industry entry. For early-stage projects with limited resources, the cost of compliance will become a barrier to entry. Singapore will increasingly be more suitable for teams that are committed to long-term growth with a strong compliance focus. Second, it accelerates the industry clearing process. Teams unwilling or unable to take the compliance route will be forced to exit, pushing Singapore's digital asset ecosystem towards being "high-quality, transparent, and regulated." Third, it becomes easier to attract traditional financial capital. For large institutions, regulatory clarity is paramount. The introduction of the DTSP effectively opens the door for these institutions. For example, family offices, bank-backed trading institutions, and other traditional players with stringent compliance requirements are expected to formally participate in the Web3 ecosystem under Singapore's clear regulatory policies.

In summary, I view the implementation of the DTSP as not a "crackdown" but a "reconstruction." It will help Singapore establish a mid- to long-term ecosystem that truly integrates traditional capital with crypto innovation.

Chen Wu: I completely agree with the points made by the previous two speakers. At its core, the government's introduction of this policy aims to optimize and upgrade the country's overall economic structure. The central focus of the DTSP actually revolves around anti-money laundering (AML) issues. The essence of all compliance regulation essentially boils down to two points: the first is AML, and the second is investor protection.

Currently, most compliance frameworks around the world start with AML (Anti-Money Laundering) as the first step. Why? Because it serves as the fundamental baseline for the global financial system. From this perspective, to understand why Singapore made this decision, we must consider it from the level of national strategy.

Many people mention that Singapore is one of Asia's financial hubs, alongside Hong Kong. However, if you look at the data, Singapore is not as financially "dependent" as one might imagine. The financial sector accounts for approximately 13% of its GDP, whereas Hong Kong's financial sector reached a peak of around 23-24% of GDP. As a sovereign country, Singapore's foundation lies in its irreplaceable geographic position—a critical trade hub that connects East and West.

Its economic development journey started with entrepot trade and gradually expanded to high-value-added processing and supply chain services. Coupled with its elite governance, education, technology, real estate policies, and other factors, it has built a robust national system. Therefore, from a macro perspective, Singapore does not need an influx of "low-threshold capital" but instead places greater emphasis on stable, high-quality, and controllable capital.

Turning back to the financial sector itself, Singapore has a significant advantage in banking: total assets, profitability, non-performing loan ratios, payment and clearing capabilities, and so on, all outperform Hong Kong. However, in terms of capital markets, Singapore is relatively weaker, with IPO numbers consistently underwhelming and daily trading volumes of approximately 8–10 billion USD, far below Hong Kong's levels. On the other hand, in the field of asset management (Wealth Management), Singapore leads the pack in Asia.

The rise of its wealth management industry can be attributed to the influx of high-net-worth individuals and family offices. These investors are drawn to Singapore's wealth security and risk-hedging value. However, this "capital inflow without project-based landing" scenario has also led to certain risks—such as untaxed capital inflows, inflated housing prices, and increased social costs. Especially after the exposure of the "Fujian Gang Money Laundering Case" in 2023, the external perception of the cryptocurrency industry has faced some skepticism.

Thus, this regulatory upgrade is not just a response to international pressure but a systematic move at the policy level to "eradicate financial gray areas and enhance the quality of capital."

Ye Su: Although our fund is not registered in Singapore, a significant portion of our LPs (limited partners) are based there due to the concentration of Asian LPs in that region. Many of our LPs come from licensed institutions or large enterprises. Overall, Singapore’s policy framework can be distilled into two core principles: AML and investor protection.

From a micro perspective, we’ve also observed some tangible social issues: crypto companies renting luxurious offices, not paying local taxes, driving up housing prices and Certificate of Entitlement (COE) costs, while local residents feel excluded from the industry's benefits. This phenomenon of "resource crowding out" has, in practice, prompted the government to respond to public sentiment through regulation. Coupled with 2023’s money laundering cases, the entire regulatory landscape is entering a phase of "precision governance." This is not just about tightening the rules but about the government adjusting the structure of incoming capital and reinforcing social trust.

Additionally, from the perspective of institutional distribution, the licensing and exemption list issued by MAS this time includes major platforms such as Circle, Coinbase, and HashKey, as well as platforms involved in OTC, custody, or derivatives. The ones truly impacted are more likely to be project teams and startups. This is because Singapore's startup ecosystem is not as vibrant as that of Hong Kong, and this type of project is the group most affected by the policy adjustments.

BlockBeats: What are the thresholds and considerations for applying for a DTSP license?

Valentina: In the media statement MAS released on June 6th, there was one very critical sentence: they will set a high threshold for licensing and "will not issue licenses lightly." The meaning is quite clear: applying for a DTSP license is exceptionally challenging.

So, my suggestion is to start with understanding the two foundational types of licenses: PSA (Payment Services Act) and CMS (Capital Markets Services). These two license categories currently form the most basic regulatory framework recognized by MAS. If you plan to apply for a license, the first thing to ensure is that your institution has robust KYC/AML protocols and fund segregation mechanisms in place. This is not just a procedural requirement on paper—it must be implemented into daily operations, technical systems, and data management. Singapore places a strong emphasis on technical compliance and operational transparency. Without long-term systematic planning, it would be very difficult to successfully navigate the application process. So, I highly recommend that project teams thoroughly research the scope of PSA and CMS and their paths to compliance before even considering DTSP applications.

Christopher Liu: Let me add to that. First, a quick clarification: Matrixport is currently one of the 33 licensed entities in Singapore, and we are also in the process of applying for another type of license. So, we are hands-on participants in this process. I agree entirely with Tina. Singapore’s regulatory framework is very clear: DTSP is designed to supplement what PSA does not cover, but the core of the regulatory system is still PSA. MAS has explicitly stated that there won’t be repetitive regulation, meaning the same business activity doesn’t need to go through multiple license applications.

In my years of experience applying for licenses in multiple jurisdictions, one of Singapore’s advantages is centralized regulation: OTC, custody, stablecoins, and exchanges are all managed under a single regulator, MAS. This streamlines communication and ensures consistent processes. However, regulatory requirements are also continuously evolving. Early on, the focus might have been mainly on AML and Technology Risk Management (TRM), but now it encompasses user protection, conflict of interest, and other areas. Especially after the consecutive industry-wide collapses in 2022, regulators have expanded their focal points significantly.

Overall, Singapore remains a very rational regulatory environment. Although the media sometimes portrays it in a more dramatic light, DTSP is not a "ban" but rather a "complement." Currently, almost every region in the world is strengthening its licensing mechanisms, and this is set to become an irreversible long-term trend.

BlockBeats: Thank you very much, Mr. Liu, for sharing your insights. One final question: Will DTSP have any impact on this year's TOKEN2049 event?

Christopher Liu: I don't think so. TOKEN2049 is a commercial event and does not fall under the scope of licensing regulation. Even during the F1 period, when advertising was prohibited, TOKEN2049 was still allowed to conduct various promotions within the venue. This shows that Singapore continues to welcome industry exchanges and technology showcases, though there are higher requirements for financing and operational compliance. So everyone can participate with confidence.

BlockBeats: Alright, once again, thank you to all the guests for their wonderful insights. From today's discussion, it is clear that regulatory boundaries are becoming increasingly defined, and compliance is no longer an "optional" consideration, but rather the "entry pass" to the market. The future of Web3 will not be about opposing regulation but about co-building a new order alongside policies.

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