Singapore Shows Unregulated Crypto Firms the Door – Fleeing to Other Countries Is Becoming More Difficult

Singapore has officially banned unlicensed crypto companies from serving customers abroad. The message from the exchange sofa (MAS) is clear: get a permit or leave. With this, Singapore closes a long-standing legal loophole that many companies have used to operate globally from the city.

What seems like a sudden change of course is actually the logical consequence of years of policy. Singapore wants to do away with “regulatory arbitrage” – circumventing rules by moving to more permissive countries. And Singapore is not alone: ​​around the world, regulations for crypto companies are becoming increasingly strict.

Unlicensed businesses are drifting

The Monetary Authority of Singapore stressed that its position has been known since 2022. Businesses offering services to customers abroad simply need to be licensed. Nothing has changed in the law – patience has simply run out.

For a long time, crypto entrepreneurs used Singapore as a base: As long as they didn’t have Singaporean clients, they could fly under the radar. But now that space is gone. “Companies that want to skirt the rules will eventually have nowhere to go — except maybe the moon,” said lawyer Joshua Chu.

No guarantees in Hong Kong, Dubai or Thailand

The exodus from Singapore begs the question: where can these crypto companies go next? Hong Kong, Thailand and Dubai are popular options, but regulations have been tightened there too.

Hong Kong, for example, forced all unlicensed exchanges out of the country by 2024. And while it likes to portray itself as crypto-friendly, only 10 licenses have been issued so far – far fewer than Singapore.

Thailand recently expelled five exchanges due to money laundering risks. The Philippines now requires every crypto firm to have a physical office in the country. Even Dubai, once seen as a “crypto safe haven,” is imposing stricter anti-money laundering rules after being removed from the FATF’s gray list in 2024.

Global trend towards stricter regulations

Singapore is a member of the Financial Action Task Force (FATF), as are Hong Kong, the EU and South Korea. These countries are implementing stricter rules for transparency, anti-money laundering and supervision of crypto transactions.

Pressure on non-member states is mounting: countries that fail to comply risk being placed on the grey list – which has serious economic consequences. Pakistan, for example, is estimated to have lost $38 billion in economic growth during its time on the list.

Crypto nomads are losing safe havens

The bottom line is clear: the days when crypto companies could easily hop from country to country to avoid regulations are over. Even the most progressive crypto hubs now demand licensing, oversight, and transparency.

The coming months will be crucial for many companies. Many will have to reorient, professionalize or stop their activities. Compliance is no longer an option – it is the new standard in crypto.