The latest regulations clampdown on Singapore’s offshore digital asset companies has sparked a wave of emergency exits and staff restructuring among major crypto exchanges operating in the city’s state without a license.
Bit and Bit are trading both top 10 cryptos worldwide by trading them worldwide, but now they’re preparing Shift operation Outside of Singapore, sources familiar with the issue have been revealed. Bitget will move staff to crypto-friendly jurisdictions such as Dubai and Hong Kong, but BYBIT is weighing the same move. Both exchanges declined to publicly comment.
The move follows a final warning from Singapore’s Financial Authority (MAS), which issued an order on May 30 to the crypto company responsible for its Singapore-based business providing services to its overseas clients to halt such activities by June 30.
MAS Crockdown causes panic and work horror
With the MAS decision, many offshore crypto companies have actively rattled their local teams. Arthur Cheong, founder and CIO of Defiance Capital LLC, warned that hundreds of jobs could be at risk as many exchanges have front office teams that include business development and sales, as many exchanges are located in Singapore to serve global clients.
“This is almost as good as the evacuation procedure,” said Patrick Tan, general counsel at Chainargos, a Blockchain Analytics company that is not affected by the directive.
“The calls are always taking time, given the impact on companies headquartered in the outskirts of Singapore. Some are in a hurry to understand their exposure and risks,” said Chris Holland, a partner at Singapore-based consulting firm HM.
Singapore has long been a regulated, innovation-friendly Crypto hub, selling key players like Coinbase and Crypto.com to set up local businesses. However, the city-state continues to carry the wounds of the 2022 market conflict, causing several well-known local crypto ventures to collapse. In response, MAS tightened surveillance while increasingly reducing surveillance for Takis, restricting advertising, and tightening surveillance.
The May directive was based on the Financial Services and Markets Act of 2022, and MAS had already indicated its intention to curb unauthorized digital asset providers. In a follow-up on June 6th, MAS said only the number of “very few” providers will be directly affected, but companies remain unclear as to how the rules apply to hybrid or distributed operating models.
Regulators approach as offshore crypto companies scramble to define operations
The opaque structure of many offshore exchanges has long complicated the crypto compliance environment in Singapore. Grace Chong, head of financial regulatory practices at Drew & Napier LLC, pointed out by companies occupying legitimate “gray territory” to leverage their Singapore-based staff to support foreign businesses without clearly defined boundaries.
MAS claims it is consistently expecting that. “This move should not be a surprise,” said a MAS spokesman. “Already licensed entities are not affected by this latest guidance.”
Still, the sudden execution was caught off guard. Unlike licensed players, offshore entities must make quick adjustments or face possible enforcement actions.
Exchanges like Binance, which have been on MAS’s investor alert list since 2021, represent just how difficult regulatory navigation is. Binance CEO Richard Teng describes the company as “remote-first,” adding that debate about the global headquarters is still ongoing. A Binance spokesman reiterated the exchange’s intention to comply with local regulations around the world, but did not provide details about its Singapore business.
Once masses are netting, even other jurisdictions such as Dubai, Hong Kong and Australia have emerged as alternative bases for crypto companies that have been forced to adapt or flee.