Source: Caihua News
Author: Remote
In recent years, Web3 has become a key frontier technology explored globally, expected to give rise to new ecological development prospects for the digital economy, attracting cities like Singapore and Hong Kong to compete to enter the field.
Singapore, once praised as the 'Cryptocurrency Paradise of Asia,' recently suddenly imposed strict regulations on the Web3 industry. In contrast, Hong Kong, just a river away, has opened its arms with an open stance, welcoming new opportunities in Web3 with a more flexible regulatory framework. When the storm approaches, Hong Kong may truly be the harbor that always shines the lighthouse.
Singapore's 'heavy-handed crackdown' on Web3
On May 30, 2025, the Monetary Authority of Singapore (MAS) released a significant new regulation, implementing strict regulatory measures targeting digital token service providers (DTSP).
Analysts point out that this marks the official implementation of the cryptocurrency asset regulatory system proposed in 2022, after three years of development. The execution of this new regulation has caused a certain panic among community practitioners; this measure affects not only Web3 projects operating locally in Singapore but is also seen as a key event that may reshape the entire landscape of the Asian cryptocurrency industry.
The new regulation requires all enterprises and individuals that do not possess a DTSP license to cease operations or apply for a license by June 30, 2025, with no transition period. The new regulation covers various fields including Exchanges, Decentralized Finance (DeFi), Non-Fungible Token (NFT) platforms, wallet services, and even the publication of research reports by KOLs may fall under regulatory scrutiny.
The key regulatory points are as follows:
Strict licensing requirements: The DTSP license is only issued in "very limited circumstances" and must meet high standards such as anti-money laundering (AML) and customer due diligence (CDD).
Broad definition of "operating place": Regardless of whether the company's registered location is in Singapore, as long as there is an "operating place" (including mobile stalls and remote work) within the country providing digital asset services (including OTC trading, liquidity mining, etc.) to global users, a license is required.
Severe penalties: The new regulations require that information and documents provided to the MAS must be reasonably and prudently ensured to be not false or misleading. Individuals violating Article 176 (1) or 176 (3) of the FSM Act may be committing an offense and could face fines or imprisonment upon conviction. MAS emphasizes that there is no transition period, and violators will face penalties according to the law.
Some analyses suggest that Singapore's new DTSP regulations, characterized by "no buffer period", "full coverage", and "zero tolerance", have completely ended the loose era of its "crypto paradise in Asia". This means that many small and medium projects and practitioners are facing a dilemma of "either high compliance costs or exit", which may trigger a wave of "mass withdrawal" in the Industry.
Hong Kong embraces Web3.
In stark contrast to Singapore's DTSP new regulations of "tightened regulation", Hong Kong is actively embracing the Web3 industry with a combination of "precision regulation + open innovation".
Since the release of the "Policy Declaration on the Development of Virtual Assets" in 2022, Hong Kong has gradually established a clear regulatory system for Web3, covering key areas such as virtual asset trading platform (VATP) licensing, stablecoin regulation, and the compliance of over-the-counter (OTC) transactions, laying a solid foundation for the development of Web3.
According to data from the Hong Kong Securities and Futures Commission, up to now, 10 virtual asset trading platforms including OSL Digital Securities Limited, EXIO Limited, and Hash Blockchain Limited have obtained licenses, clearly allowing retail investors to participate in trading.
In addition, Hong Kong is also actively exploring innovations in financial products such as virtual asset spot ETFs, RWA tokenization, as well as derivatives and staking services.
For example, Hong Kong approved the issuance of the world's first tokenized MMF ETF in April this year, becoming the largest virtual asset ETF market in the Asia-Pacific region; recently, Hong Kong's "Stablecoin Regulation" officially took effect, marking an important breakthrough in the regulation of digital assets in Hong Kong.
In terms of taxation, Hong Kong provides tax incentives for eligible virtual asset trading, significantly advantageous compared to Singapore's high compliance costs after the new regulations.
Data shows that by the end of 2024, Hong Kong's Cyberport has attracted nearly 300 Web3 companies, with a cumulative financing scale exceeding 0.4 billion HKD, fully demonstrating the attractiveness of Hong Kong's regulatory policies.
Many market opinions believe that compared to Singapore's tightening regulations, Hong Kong's strategy of "regulation and development both emphasized" is expected to become a new anchor point for global capital. The tightening of regulations in Singapore may lead Web3 companies to migrate to Hong Kong in search of a more friendly regulatory environment, thus driving a significant inflow of professional talent to Hong Kong, bringing rich experience and innovative thinking to Hong Kong's Web3 industry, and enhancing its technological strength and innovation capabilities.
It is reported that Hong Kong Legislative Council member Wu Jizhuang tweeted that Singapore recently released the "Guidelines on Licensing for Digital Token Service Providers," which introduces new policies for companies, institutions, and individuals engaged in virtual assets. Since the publication of the virtual asset declaration in 2022, Hong Kong has welcomed the development of industries. According to informal statistics, over a thousand Web3 companies have established themselves in Hong Kong. Companies engaged in related industries in Singapore are encouraged to relocate their headquarters and teams to Hong Kong, and assistance will be provided for policies and establishment.
Industry insiders expect that the migration of existing Web3 institutions from Singapore will bring tens of billions of dollars in asset management scale to Hong Kong. It is anticipated that the average daily trading volume of Web3 in Hong Kong may experience a surge in the second half of 2025. "As Singapore tightens its regulations, Hong Kong has the opportunity to take over its market position and become a new center for Web3 innovation and CNI Xiangmi Lake Fintech Index."
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