On June 30, new strict regulations in Singapore forced unlicensed crypto exchanges to shut down immediately. This article examines the implications of these changes.
New Reality: Shutdown of Unlicensed Exchanges
The Monetary Authority of Singapore (MAS) imposed new rules requiring all unlicensed platforms serving overseas clients to shut down immediately without a transition period. Violators now face steep fines and imprisonment. This was a significant blow to many exchanges that had previously relied on looser regulatory norms.
Migration: Hong Kong and Dubai as New Crypto Hubs
Many exchanges, such as Bitget and Bybit, have begun relocating their operations to more favorable jurisdictions like Hong Kong and Dubai. Hong Kong offers tax incentives and lower compliance costs, attracting over 1,000 Web3 companies in the past six months. Dubai, on the other hand, offers free zones with a 0% tax rate.
Survivors’ Game: Licensed Crypto Exchanges Monopoly
As a result of the new stringent regulations, only 33 licensed firms continue their operations, creating significant monopolistic conditions. Companies must meet high requirements, including substantial capital investments and local management. In just one week, the number of Coinbase users in Singapore surged by 300%.
The situation in Singapore's crypto industry is changing. With the advent of new rules, crypto exchanges must restructure their strategy to adapt to stringent requirements and new conditions.
