Singapore Forces Unlicensed Crypto Firms to Exit by June 30

Singapore is intensifying its regulatory measures on cryptocurrency firms operating without a license, leading to significant changes within the industry. On May 30, the Monetary Authority of Singapore (MAS) issued a final notice mandating that unlicensed digital asset exchanges with operations in Singapore and serving overseas clients must cease operations by June 30. This directive has prompted major offshore players, including Bitget and Bybit, to plan their exit from the country and relocate their staff to more crypto-friendly regions such as Dubai and China Hong Kong.

MAS’s stringent regulations specifically target firms that conduct front-office functions, such as sales or client services, from Singapore while serving foreign users. Although the regulator has clarified that only a "minimal" number of companies are affected, the impact is substantial, potentially endangering hundreds of jobs. Arthur Cheong of DeFiance Capital highlighted that many of these offshore firms have significant teams based in Singapore, making the regulatory pressure particularly acute.

Bitget and Bybit, both prominent exchanges by volume, are now in the process of reorganizing their teams in response to the MAS’s crackdown. The regulatory environment has left many firms uncertain about whether they fall under the new rules or if they can continue operations with adjustments. This uncertainty has created a challenging landscape for crypto firms, as they navigate the evolving regulatory framework.

Crypto analyst Lana Yang described Singapore’s regulatory approach as a game of "whack-a-mole," where regulatory pressure pushes exchanges like Bitget to relocate to regions with more favorable conditions, such as Dubai and China Hong Kong. This shift may not halt crypto activities but rather move them to different jurisdictions, making Bitget’s decision to relocate a strategic move.

Despite being a global crypto hub and home to licensed giants, Singapore’s cautious approach following the 2022 crypto downturn may affect its reputation as a digital asset haven. Competitors like China Hong Kong are actively courting the industry with clearer regulatory paths, potentially drawing crypto firms away from Singapore. While some view the MAS notice as a necessary clean-up, others see it as a regulatory chokehold that could stifle innovation and growth in the sector.

Legal experts have expressed concerns about the lack of clarity surrounding what constitutes "offshore services," which could lead to confusion and case-by-case scrutiny. This ambiguity may further complicate the regulatory landscape for crypto firms, making it difficult for them to comply with the new rules and continue their operations in Singapore.