MAS unleashes the world's strictest measures, unlicensed exchanges wander the Earth tonight.

On June 30, the regulatory deadline in Singapore arrives, marking a critical "watershed" for encryption exchanges: licensed operators like Coinbase, OKX, and Hashkey ride the wave, while unlicensed ones begin to retreat!

The Monetary Authority of Singapore (MAS) has stipulated in Part 9 of the Financial Services and Markets Bill 2022 (FSMA), effective from June 30, 2025, that all entities registered in Singapore providing digital token services to overseas customers must obtain a Digital Token Service Provider (DTSP) license, or they must immediately cease cross-border operations.

The "Twilight of Unlicensed Exchanges"

Singapore, once regarded as a "haven" for global Web3 projects and encryption exchange, is now, with its consistent prudence and decisiveness, leading a new trend in the regulation of crypto assets in Asia and even globally. The new regulations by the Monetary Authority of Singapore (MAS) concerning Digital Token Service Providers (DTSP) are undoubtedly the loudest wake-up call in this transformation. Proposed in 2022, this new regulation has been in the works for three years and will be officially implemented in full on June 30, 2025.

The core provisions of the new regulations are highly "lethal": mandatory licensing, no transition period, regulation of overseas operations, and violators will face severe penalties, including hefty fines and potential imprisonment.

MAS's move is interpreted as a "zero tolerance" approach towards unlicensed exchanges, aimed at maintaining Singapore's reputation as a responsible global financial center and preventing financial crime risks such as money laundering. The release of the new regulations has caused quite a stir in the industry, with many projects and exchanges operating in Singapore but yet to obtain licenses facing a tough choice: either accelerate their compliance applications or be forced to "wander the Earth," looking for new footholds. Currently, in addition to exchanges like Coinbase SG, OKX SG, and Hashkey that have obtained MAS's Major Payment Institution (MPI) license, some unlicensed cryptocurrency exchanges are considering exiting Singapore, which may even lead to hundreds of employees relocating to regions with more lenient regulations, such as Dubai, Kuala Lumpur, or Hong Kong.

In the early stages of development of the cryptocurrency industry, some exchanges rapidly emerged by exploiting regulatory vacuums or gray areas, adopting unlicensed or lightly regulated operational models. Although this model may have led to rapid business expansion and lower operating costs in the initial phase, its inherent vulnerabilities and unsustainability have increasingly come to light with the awakening of global regulatory awareness and the gradual establishment of regulatory frameworks.

The lack of effective external regulation and internal auditing is the biggest Achilles' heel of unlicensed exchanges. The funds deposited by users on these platforms are highly susceptible to threats such as platform misappropriation, mismanagement, internal fraud, or hacker attacks. In the event of such incidents, due to unclear primary responsibility of the platform and lack of regulation, users often find themselves helpless, and losses are difficult to recover. Such incidents have been common in the history of cryptocurrency development: in 2022, FTX misused user funds, ultimately leading to losses of billions of dollars; in 2025, Bybit suffered a hacker attack, with approximately $1.5 billion worth of ETH and stETH stolen. These cases point to one fact: on unlicensed platforms lacking regulation and transparency, the safety of users' assets is like the "Sword of Damocles" hanging overhead, which may fall at any time.

At the same time, unlicensed exchanges are more likely to breed misconduct such as insider trading, false trading volume, and price manipulation, and due to the failure to strictly implement or completely lack KYC and AML measures, they can easily become channels for the flow of illegal funds, being used for money laundering, terrorist financing, evasion of sanctions, and other illegal activities. This not only violates the laws of various countries but also seriously challenges the global financial order. In recent years, the U.S. Financial Crimes Enforcement Network (FinCEN) has been working to strengthen anti-money laundering regulation of cryptocurrency exchanges, wallets, and mixing services, and has expanded the application of the Bank Secrecy Act to the virtual currency sector.

According to incomplete statistics, a considerable number of cryptocurrency exchanges go bankrupt every year due to mismanagement, security vulnerabilities, regulatory pressure, or outright "running away." Notable examples include: the bankruptcy of MT.Gox in 2014, the bankruptcy of FCoin in 2020, and the bankruptcy of FTX in 2022, all of which brought huge losses to users. The "great retreat" under Singapore's new regulations may reshape the landscape of the cryptocurrency industry in Asia and even globally, reducing appeal risks.

Global Regulatory Benchmark "Licensed to Operate"

The regulatory actions in Singapore are not isolated cases, but rather a reflection of the global transition of the cryptocurrency industry from early "wild growth" to compliant development. Major economies and financial centers around the world are actively exploring and constructing regulatory frameworks that adapt to the encryption asset ecosystem, striving to encourage financial innovation while effectively preventing risks, protecting user interests, and maintaining financial stability.

Given the natural cross-border characteristics of encryption assets, regulatory efforts in a single country or region are difficult to completely cover all risks. Therefore, international cooperation and the establishment of unified standards are particularly important. Multiple international organizations are actively promoting work in this area, striving to bridge the regulatory gap and enhance the overall robustness of the global encryption asset ecosystem.

• Financial Action Task Force (FATF): As the global standard-setter for anti-money laundering and counter-terrorist financing (AML/CFT), the FATF plays a central role in the regulation of encryption assets. The FATF has issued guidance for virtual assets (VAs) and virtual asset service providers (VASPs).

• Financial Stability Board (FSB): The FSB is concerned about the potential impact of encryption assets on global financial stability, particularly in areas such as stablecoins and DeFi. The agency has issued high-level recommendations to promote comprehensive, consistent regulation, oversight, and monitoring of encryption asset activities, markets, and VASPs to address potential systemic risks.

• International Organization of Securities Commissions (IOSCO): IOSCO is committed to establishing international standards for the regulation of encryption asset markets, with a focus on investor protection and market integrity. The organization has issued policy recommendations for the encryption asset market and has called on member countries to enhance regulatory cooperation to address cross-border regulatory challenges.

The efforts of these international organizations are gradually forming a multi-level global encryption asset governance framework, encouraging national regulatory agencies to develop and implement their own regulations based on common principles, thereby reducing regulatory arbitrage opportunities and enhancing the overall compliance level of the global encryption market.

The cryptocurrency industry is at a historic crossroads. The era once filled with mavericks and regulatory vacuums is gradually fading away, replaced by a new epoch that increasingly emphasizes rules, order, and responsibility: compliance has become the irreversible fate of cryptocurrency exchanges, and unlicensed operating models are inevitably heading towards their end. As the market matures, users are more inclined to choose regulated and secure licensed platforms, concentrating towards leading licensed institutions.

Strategic Field of Leading Exchanges

Coinbase and OKX, as leaders in the industry, showcase two distinctly different strategic paths and evolutionary characteristics in their global compliance processes.

Coinbase, as a model of "native compliance", was born in the relatively mature regulatory environment of the United States. From the very beginning of its establishment, it has integrated compliance into its corporate DNA, viewing it as a core competitive advantage. Coinbase was the first to obtain licenses in several states in the U.S., including the virtual currency business license (BitLicense) issued by the New York State Department of Financial Services (NYDFS), which has very strict regulatory requirements. Subsequently, Coinbase's globalization strategy has shown characteristics of being based on the U.S. market while gradually radiating outward, striving to obtain clear local regulatory licenses in key markets such as the EU and Asia-Pacific.

Despite facing ongoing scrutiny and even litigation from the U.S. Securities and Exchange Commission (SEC) regarding whether certain crypto assets constitute "securities," Coinbase is actively pushing for legislative clarity and supporting legislative attempts like the "Stablecoin GENIUS Act" aimed at providing clear rules for the industry. Notably, Coinbase was selected for inclusion in the S&P 500 Index by the S&P 500 Index Committee for its "high standards of adherence to profitability, regulatory compliance, and governance," further confirming that its compliance and governance levels in mainstream financial markets are recognized.

In contrast, OKX represents the benchmark of "adaptability". OKX's early development was more global in nature, with its operations spanning various regulatory environments, some of which are vastly different or even have regulatory vacuums. This provided opportunities for rapid expansion but also sowed the seeds of compliance risks. In February 2025, OKX's Seychelles subsidiary reached a settlement with the U.S. Department of Justice, paying a fine of $84 million and forfeiting approximately $421 million in revenue generated from U.S. customers during this period. In the same year, OKX announced the official launch of its centralized cryptocurrency exchange and OKX Web3 wallet in the U.S. In recent years, OKX has demonstrated a strong adaptability to the global regulatory environment, accelerating its compliance breakthrough worldwide. Through a series of measures such as obtaining key market licenses, strengthening internal risk control, and bringing in professional talent, it has aligned itself with mainstream global compliance standards.

In terms of global licensing layout, OKX holds high-quality licenses such as the EU MiCA license and the Singapore MPI license, and has registered as MSB and is rebuilding compliance in the United States, with its business increasingly focusing on developed markets, even comparable to Coinbase. Furthermore, both exchanges have obtained key licenses in several important regions worldwide, and the gap is gradually narrowing.

These two compliance paths provide valuable references for the industry: Coinbase's early emphasis on compliance can avoid high costs but may limit the speed of business expansion; OKX's later compliance transformation, although accompanied by greater risks and costs, can still achieve "rebirth through fire". Regardless of which path is chosen, compliance has become a necessary condition for encryption exchanges to win user trust, attract institutional funds, and achieve sustainable development. The two distinctly different compliance models are responding to the era's demands for stricter global regulation in their own ways.

For those unlicensed exchanges that are still operating outside of regulation and have no intention of compliance, regardless of whether they are ready, the industry's future response may only be one phrase: Bye Bye.

Disclaimer:

This article is for reference only. It only represents the author's views and does not reflect the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may be subject to significant fluctuations. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial condition. Please consult your legal/tax/investment professionals regarding your specific situation. You are responsible for understanding and complying with applicable local laws and regulations.