WPRC 2026#035

Crypto Regulation: For Builders

WPRC-035· SG· 2025. 10· GOVERNANCE

Crypto Regulation: For Builders

As crypto regulation impacts the markets, builders must be aware of how things work and where they are going.

Contributors

Ulanda OnDrew & Napier LLC·Monin UngMUNG Legal

The WhitePaper Reading Club 31 - 2025-Oct-07
Crypto Regulation: For Builders	Ulanda On (Drew & Napier LLC), Monin Ung (MUNG Legal)

Summary

As crypto regulation impacts the markets, builders must be aware of how things work and where they are going.

Why This Is Important

(i) Laws now determine which models—DeFi, exchanges, or stablecoins—are viable. (ii) Compliance opens banking rails and investor access; ignorance risks shutdowns or prosecution.

Key Innovation

(i) US passed its 1st federal crypto law for payment stablecoins (GENIUS Act). (ii) EU’s MiCA harmonizes licensing/passporting across 27 states. (iii) UK is phasing a FSMA-style regime. SG/HK run clear licensing (PSA/DTSP; SFC/HKMA) incl. stablecoin issuers.

Overview

(i) US GENIUS (Guiding and Enhancing National Innovation for U.S. Stablecoins Act) Act (2025): first federal crypto law; legalizes payment stablecoins with 100% reserves. (ii) EU MiCA (2024): unified passport regime for 27 countries. (iii) UK: integrates crypto into its financial-services law via phased rules. (iv) Singapore: expanded Payment Services Act with the new DTSP regime. (v) HK: dual SFC/HKMA licensing, now extended to stablecoin issuers.

Legal Glossary

SG:PSA: Payment Services Act (2019)	SG:DTSP: Digital Token Service Provider (2025)	SG:CFT: Countering the Financing of Terrorism.	SG:MPI: Major Payment Institution (MAS class)	HK:SFC: Securities and Futures Commission
HK:VASP: Virtual Asset Service Provider	HK:VATP: Virtual Asset Trading Platform	HK:HKMA: HK Monetary Authority	US:CFTC: Commodity Futures Trading Commission	US:SEC: Securities and Exchange Commission
US:BSA: Bank Secrecy Act	EU:ESMA: EU Securities and Markets Authority	EU:CASP: Crypto-Asset Service Provider	EU:FSMA:Financial Services and Markets Act (UK 2000)	EU:EBA: European Banking Authority
UK:FCA: Financial Conduct Authority	UK:FPO: Financial Promotion Order	UK:SI: Statutory Instrument

Frequently Asked Questions by Builders

Jurisdiction	Which jurisdiction should I start my project in ?	Consider nationalities of founding team, where investors and team based and regulatory framework corresponding with project growth
Licensing	Do I need a licence?	Clear laws on payment stablecoin issuance and payment platforms
Token	How do I issue tokens for fundraising?	Payment I Commodity I Functionality I Securities I Meme Coins “It is the Division’s view that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws” https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins
RWA	(i) Which asset do I structure for tokenisation? (ii) How do I issue tokens for fundraising?	(i) Depends on business model for example real estate could be structured as rental properties with yields where the yields are tokenised (ii) Depends on nature of tokens and securities laws
DAO	(i) DAO is wholly decentralised (ii) DAO is easier to build communities	Yes and No: DAO requires a legal wrapper to shield individual risksWhether DAO or not, communities require management and constant engagement
KYC/AML	(i) Why do I need KYC/AMLLook at a thousand different projects without KYC/AML(ii) KYC/AML will kill my business (iii) When do you require KYC/AML?	Yes and No: (i) There are certain short windows in regulations to exploit but these are not sustainable. (ii) Financial Institutions - Banks, credit institutions, insurance companies, and payment service providers (iii) Fintech & Virtual Asset Service Providers: Companies offering digital payment services, cryptocurrency exchanges, and other financial technology solutions (iv) High-Value Goods Dealers: Businesses dealing in art, real estate, or precious metals are also subject to enhanced due diligence (v) Other Regulated Entities: Casinos, money transfer services, investment funds, other facilitator of financial transactions (vi) All businesses should be alert to money laundering suspicious activities

Regional Overview

SG	What’s unique (facts): (i) DTSP expands MAS oversight to SG-incorporated firms providing digital token services outside Singapore; MAS says it will “generally not issue licenses,” effectively prohibiting those models. (ii) Scope is extraterritorial compared to the PSA’s “in Singapore” perimeter. (iii) MAS’s DTSP start date: 30 Jun 2025; firms must license or cease DT services or structure it such that their activities fall outside the scope of the DTSP regime. “DTSPs… formed or incorporated in Singapore but which provide [digital token] services ‘outside Singapore”. “MAS… will generally not issue licenses under the DTSP framework”. Note: the key is actually the provision of “digital token services” which is quite clearly defined - covers only certain specific activities. These are centralised exchanges, custodial services, DPT transfer services, digital payment token sales (not all tokens are captured here, for e.g. plain vanilla governance tokens are not necessarily digital payment tokens), front-end customer facing aspect of DEXes and advisory services in respect of digital token sales. There remains the technical services exemption - services provided by any technical service provider that support the provision of a digital token service and do not enter into possession of any money or digital token under that digital token service are also carved out from the remit of the regime. Though, what constitutes technical services needs to be examined in greater detail.Note: XSGD, the only Singapore dollar-backed stablecoin, debuted on the United States-based cryptocurrency exchange Coinbase on 1 October 2025. XSGD, which has been issued by StraitsX since 2020, is pegged to the Singapore dollar 1:1 and fully backed by reserve assets held by DBS and Standard Chartered banks.For builders: Pro: clear, published rules; licensing ≈ institutional-grade credibility. Con: approvals are slow/expensive; [If you have a Payment Services Act licence, you can generally provide such services to offshore customers if it’s part of your business model.]). Con: retail marketing limits and suitability tests persist. Note: SG-incorporated centralised exchanges that serve only overseas users is now in-scope under DTSP and likely cannot be licensed unless there are exceptional reasons for their business model - the reason being that there is no reason for the entity to be incorporated in Singapore if they are not offering to Singapore users (argument being that they are just trying to take advantage of regulatory arbitrage. Question: Singapore essentially wants people to stop using the jurisdiction for regulatory arbitrage?For investors: (i) Pro: institutional pilots (Project Guardian-style) and strong bank custody; (ii) Con: retail access constrained; heavier AML scrutiny for FOs/funds post-2023. Note: Accredited investors / institutional investors generally have less constraints under the regime - service providers can provide staking services to such investors, just not the retail public. However, retail public can stake their tokens on their own (they just can’t do it via the regulated institution). E.g: Tokenized T-bill product for qualified investors via a PSA-licensed MPI; retail yield promos restricted.For employees: (i) Pro: high comp in compliance/engineering; safe city, English, good visas for senior talent. (ii) Con: high cost of living; foreign hires depend on employer sponsorship.
HK (SFC — VASP/VATP & HKMA stablecoins)	(i) Mandatory SFC licensing for centralized VATPs operating in/marketing to HK; transitional period ended 31 May 2024. (ii) Retail access allowed only with virtual asset knowledge assessment ; PI is ≥ HKD 8M portfolio. (iii) No capital-gains tax; frequent trading may be taxed up to 16.5%. Note: OTC service providers and virtual asset custody service providers now require a licence in HK - “Virtual asset trading platforms must be licensed by the SFC”. “Retail investors… only if they meet suitability requirements… PI… at least HKD 8 million”. Note:Retail participation now allowed for securities with tokenised wrapper as with for listed companies on the HK Stock Exchange For builders: Pro: clear VASP/VATP handbooks; regulator engagement; brand lift from SFC license. Con: high bar (external assessor, systems live before assessment); initial approvals limited. Note:Also similar marketing limits as those in Singapore - save that certain advertisements now require approval from the SFC. Person actively marketing any VA service to the public in HK is required to be licensed by the SFC. Certain complex products may only be offered to professional investors. Note also that if the VASP wishes to offer staking services, explicit approval from SFC is required.E.g: CEX needs SFO & AMLO authorization to cover security and non-security tokens.For investors: Pro: 0% cap-gains, licensed venues, increasing ETF/structured access. Con: retail suitability gates; PI threshold excludes many. e.g: Family office trades on an SFC-licensed venue (e.g., HashKey/OSL listed).HK Stablecoin Ordinance, single oversight, licensing and supervision by HKMA only, mandatory licensing for all issuers referencing HK dollars or operating in HK, minimum HKD25M paid up capital, emphasis on investor protection, risk management and market integrity, paves way for offshore digital yuan eCNY Caveat: real global stablecoin adoption or fragmented jurisdictional licensed stablecoin usage? WEB2 currency settlement remains in the background HK Money Service Operator Licence A Money Service Operator (MSO) licence is a mandatory regulatory approval for businesses that provide money-changing or remittance services in HK. It is governed by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO, Cap. 615) and overseen by the Customs and Excise Department (C&ED). With the increasing volume of virtual assets (VA) changing hands in HK, HK-SFC will likely be empowered to license and supervise VA dealers and custodians with new regulations. Caveat: short window for VA OTC payment solutions
US (GENIUS Act; SEC posture)	(i) GENIUS Act = first federal stablecoin law: 100% reserves (USD/T-bills), monthly public reserve disclosures, insolvency priority for holders. (ii) Issuers are subject to BSA/AML; must be able to “seize, freeze, or burn” payment stablecoins when lawfully required. Question: Will this increase the demand for permissionless ecosystem (Hyperliquid, Uniswap, others OR will people be ok with regulated approaches (iii) SEC approved spot Bitcoin ETPs but emphasized narrow scope and continued concerns. - “Requires 100% reserve backing… monthly, public disclosures”. “The vast majority of crypto assets are investment contracts”.(ii) SEC No-Action Letter: Tecent No-Action Letter to DoubleZero (DePIN) represents is part of a broader, deliberate strategy under the SEC's "Project Crypto" and a newly established Crypto Task Force, which has replaced the former enforcement-heavy unit. A departure from "regulation-by-enforcement" toward a framework that aims to foster innovation and provide "bright-line rules". Furthermore, this change is reinforced by collaboration between the SEC and the Commodity Futures Trading Commission (CFTC) to unify their approaches and bring economic activity back to the US. For builders: Pro: bank-grade stablecoin path; big market and capital; clearer consumer protections. Con: SEC still treats most tokens as securities; DeFi and non-stablecoin areas face litigation risk. e.g: USD stablecoin issuer meets 100% cash/T-bill reserves with monthly disclosures and BSA compliance; gains bank/fintech distribution. Recommend proactive and early engagement with regulatorsFor investors: Pro: Spot Bitcoin ETPs on national exchanges; disclosure & market-abuse controls apply. Con: ETP approval “should in no way signal… crypto asset securities” approval. For employees: Con: higher personal legal exposure if tied to token issuance/DeFi operations; immigration not tailored to crypto.
EU & UK (MiCA; UK draft SI)	EU MiCA: (i) MiCA “institutes uniform EU market rules for crypto-assets… covering transparency, disclosure, authorisation and supervision”. (ii) Transitional: “grand-fathering” allows existing providers until 1 Jul 2026 for authorization decision.UK: (i) Creates new regulated activities (e.g., operating a cryptoasset trading platform); FCA authorization required. (ii) Defines “qualifying cryptoassets” & “qualifying stablecoin”; brings staking into FPO controlled activities. (iii) Government paused bringing stablecoin payments under PSRs “for the time being”. - “Create new regulated activities… requiring firms… to be authorised… by the FCA”. “Qualifying cryptoassets… qualifying stablecoin… specified investments”. “Qualifying cryptoasset staking… added as a new activity”.For builders: Note EU: Pro: one CASP authorization → 27-state scale (though certain light-touch regulation jurisdictions may not necessarily be treated the same by regulators in other states - e.g. Bafin (German Reg body)); Con: heavier disclosures and stablecoin prudential rules; NFTs out of scope per ESMA overview. Ambiguity under MiCA as to whether DeFi is excluded - may have regulatory updates regarding DeFi in the future as European Commission is examining this.UK: Pro: clear path via FSMA-style approval; Con: still early; marketing rules strict; staking explicitly supervised.UK broker/custodian: Need FCA authorization to “operate a cryptoasset trading platform”; can approve own promotions once authorized (FPO change).For investors: EU Pro: strong consumer protection and a public MiCA register (white papers, CASPs); EU Con: some tokens may face tougher restrictions under MiCA titles. UK Pro: integration with existing market-abuse and disclosure frameworks; UK Con: timing—rolling implementation; stablecoin payments perimeter deferred.For employees: Con: paperwork-heavy environment; multi-jurisdiction ops still require localization.

The WhitePaper Reading Club 31 - 2025-Oct-07
Crypto Regulation: For Builders	Ulanda On (Drew & Napier LLC), Monin Ung (MUNG Legal)

Summary

As crypto regulation impacts the markets, builders must be aware of how things work and where they are going.

Why This Is Important

(i) Laws now determine which models—DeFi, exchanges, or stablecoins—are viable. (ii) Compliance opens banking rails and investor access; ignorance risks shutdowns or prosecution.

Key Innovation

Overview

Legal Glossary

SG:PSA: Payment Services Act (2019)	SG:DTSP: Digital Token Service Provider (2025)	SG:CFT: Countering the Financing of Terrorism.	SG:MPI: Major Payment Institution (MAS class)	HK:SFC: Securities and Futures Commission
HK:VASP: Virtual Asset Service Provider	HK:VATP: Virtual Asset Trading Platform	HK:HKMA: HK Monetary Authority	US:CFTC: Commodity Futures Trading Commission	US:SEC: Securities and Exchange Commission
US:BSA: Bank Secrecy Act	EU:ESMA: EU Securities and Markets Authority	EU:CASP: Crypto-Asset Service Provider	EU:FSMA:Financial Services and Markets Act (UK 2000)	EU:EBA: European Banking Authority
UK:FCA: Financial Conduct Authority	UK:FPO: Financial Promotion Order	UK:SI: Statutory Instrument

Frequently Asked Questions by Builders

Jurisdiction	Which jurisdiction should I start my project in ?	Consider nationalities of founding team, where investors and team based and regulatory framework corresponding with project growth
Licensing	Do I need a licence?	Clear laws on payment stablecoin issuance and payment platforms
Token	How do I issue tokens for fundraising?	Payment I Commodity I Functionality I Securities I Meme Coins “It is the Division’s view that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws” https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins
RWA	(i) Which asset do I structure for tokenisation? (ii) How do I issue tokens for fundraising?	(i) Depends on business model for example real estate could be structured as rental properties with yields where the yields are tokenised (ii) Depends on nature of tokens and securities laws
DAO	(i) DAO is wholly decentralised (ii) DAO is easier to build communities	Yes and No: DAO requires a legal wrapper to shield individual risksWhether DAO or not, communities require management and constant engagement
KYC/AML	(i) Why do I need KYC/AMLLook at a thousand different projects without KYC/AML(ii) KYC/AML will kill my business (iii) When do you require KYC/AML?	Yes and No: (i) There are certain short windows in regulations to exploit but these are not sustainable. (ii) Financial Institutions - Banks, credit institutions, insurance companies, and payment service providers (iii) Fintech & Virtual Asset Service Providers: Companies offering digital payment services, cryptocurrency exchanges, and other financial technology solutions (iv) High-Value Goods Dealers: Businesses dealing in art, real estate, or precious metals are also subject to enhanced due diligence (v) Other Regulated Entities: Casinos, money transfer services, investment funds, other facilitator of financial transactions (vi) All businesses should be alert to money laundering suspicious activities

Regional Overview

SG	What’s unique (facts): (i) DTSP expands MAS oversight to SG-incorporated firms providing digital token services outside Singapore; MAS says it will “generally not issue licenses,” effectively prohibiting those models. (ii) Scope is extraterritorial compared to the PSA’s “in Singapore” perimeter. (iii) MAS’s DTSP start date: 30 Jun 2025; firms must license or cease DT services or structure it such that their activities fall outside the scope of the DTSP regime. “DTSPs… formed or incorporated in Singapore but which provide [digital token] services ‘outside Singapore”. “MAS… will generally not issue licenses under the DTSP framework”. Note: the key is actually the provision of “digital token services” which is quite clearly defined - covers only certain specific activities. These are centralised exchanges, custodial services, DPT transfer services, digital payment token sales (not all tokens are captured here, for e.g. plain vanilla governance tokens are not necessarily digital payment tokens), front-end customer facing aspect of DEXes and advisory services in respect of digital token sales. There remains the technical services exemption - services provided by any technical service provider that support the provision of a digital token service and do not enter into possession of any money or digital token under that digital token service are also carved out from the remit of the regime. Though, what constitutes technical services needs to be examined in greater detail.Note: XSGD, the only Singapore dollar-backed stablecoin, debuted on the United States-based cryptocurrency exchange Coinbase on 1 October 2025. XSGD, which has been issued by StraitsX since 2020, is pegged to the Singapore dollar 1:1 and fully backed by reserve assets held by DBS and Standard Chartered banks.For builders: Pro: clear, published rules; licensing ≈ institutional-grade credibility. Con: approvals are slow/expensive; [If you have a Payment Services Act licence, you can generally provide such services to offshore customers if it’s part of your business model.]). Con: retail marketing limits and suitability tests persist. Note: SG-incorporated centralised exchanges that serve only overseas users is now in-scope under DTSP and likely cannot be licensed unless there are exceptional reasons for their business model - the reason being that there is no reason for the entity to be incorporated in Singapore if they are not offering to Singapore users (argument being that they are just trying to take advantage of regulatory arbitrage. Question: Singapore essentially wants people to stop using the jurisdiction for regulatory arbitrage?For investors: (i) Pro: institutional pilots (Project Guardian-style) and strong bank custody; (ii) Con: retail access constrained; heavier AML scrutiny for FOs/funds post-2023. Note: Accredited investors / institutional investors generally have less constraints under the regime - service providers can provide staking services to such investors, just not the retail public. However, retail public can stake their tokens on their own (they just can’t do it via the regulated institution). E.g: Tokenized T-bill product for qualified investors via a PSA-licensed MPI; retail yield promos restricted.For employees: (i) Pro: high comp in compliance/engineering; safe city, English, good visas for senior talent. (ii) Con: high cost of living; foreign hires depend on employer sponsorship.
HK (SFC — VASP/VATP & HKMA stablecoins)	(i) Mandatory SFC licensing for centralized VATPs operating in/marketing to HK; transitional period ended 31 May 2024. (ii) Retail access allowed only with virtual asset knowledge assessment ; PI is ≥ HKD 8M portfolio. (iii) No capital-gains tax; frequent trading may be taxed up to 16.5%. Note: OTC service providers and virtual asset custody service providers now require a licence in HK - “Virtual asset trading platforms must be licensed by the SFC”. “Retail investors… only if they meet suitability requirements… PI… at least HKD 8 million”. Note:Retail participation now allowed for securities with tokenised wrapper as with for listed companies on the HK Stock Exchange For builders: Pro: clear VASP/VATP handbooks; regulator engagement; brand lift from SFC license. Con: high bar (external assessor, systems live before assessment); initial approvals limited. Note:Also similar marketing limits as those in Singapore - save that certain advertisements now require approval from the SFC. Person actively marketing any VA service to the public in HK is required to be licensed by the SFC. Certain complex products may only be offered to professional investors. Note also that if the VASP wishes to offer staking services, explicit approval from SFC is required.E.g: CEX needs SFO & AMLO authorization to cover security and non-security tokens.For investors: Pro: 0% cap-gains, licensed venues, increasing ETF/structured access. Con: retail suitability gates; PI threshold excludes many. e.g: Family office trades on an SFC-licensed venue (e.g., HashKey/OSL listed).HK Stablecoin Ordinance, single oversight, licensing and supervision by HKMA only, mandatory licensing for all issuers referencing HK dollars or operating in HK, minimum HKD25M paid up capital, emphasis on investor protection, risk management and market integrity, paves way for offshore digital yuan eCNY Caveat: real global stablecoin adoption or fragmented jurisdictional licensed stablecoin usage? WEB2 currency settlement remains in the background HK Money Service Operator Licence A Money Service Operator (MSO) licence is a mandatory regulatory approval for businesses that provide money-changing or remittance services in HK. It is governed by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO, Cap. 615) and overseen by the Customs and Excise Department (C&ED). With the increasing volume of virtual assets (VA) changing hands in HK, HK-SFC will likely be empowered to license and supervise VA dealers and custodians with new regulations. Caveat: short window for VA OTC payment solutions
US (GENIUS Act; SEC posture)	(i) GENIUS Act = first federal stablecoin law: 100% reserves (USD/T-bills), monthly public reserve disclosures, insolvency priority for holders. (ii) Issuers are subject to BSA/AML; must be able to “seize, freeze, or burn” payment stablecoins when lawfully required. Question: Will this increase the demand for permissionless ecosystem (Hyperliquid, Uniswap, others OR will people be ok with regulated approaches (iii) SEC approved spot Bitcoin ETPs but emphasized narrow scope and continued concerns. - “Requires 100% reserve backing… monthly, public disclosures”. “The vast majority of crypto assets are investment contracts”.(ii) SEC No-Action Letter: Tecent No-Action Letter to DoubleZero (DePIN) represents is part of a broader, deliberate strategy under the SEC's "Project Crypto" and a newly established Crypto Task Force, which has replaced the former enforcement-heavy unit. A departure from "regulation-by-enforcement" toward a framework that aims to foster innovation and provide "bright-line rules". Furthermore, this change is reinforced by collaboration between the SEC and the Commodity Futures Trading Commission (CFTC) to unify their approaches and bring economic activity back to the US. For builders: Pro: bank-grade stablecoin path; big market and capital; clearer consumer protections. Con: SEC still treats most tokens as securities; DeFi and non-stablecoin areas face litigation risk. e.g: USD stablecoin issuer meets 100% cash/T-bill reserves with monthly disclosures and BSA compliance; gains bank/fintech distribution. Recommend proactive and early engagement with regulatorsFor investors: Pro: Spot Bitcoin ETPs on national exchanges; disclosure & market-abuse controls apply. Con: ETP approval “should in no way signal… crypto asset securities” approval. For employees: Con: higher personal legal exposure if tied to token issuance/DeFi operations; immigration not tailored to crypto.
EU & UK (MiCA; UK draft SI)	EU MiCA: (i) MiCA “institutes uniform EU market rules for crypto-assets… covering transparency, disclosure, authorisation and supervision”. (ii) Transitional: “grand-fathering” allows existing providers until 1 Jul 2026 for authorization decision.UK: (i) Creates new regulated activities (e.g., operating a cryptoasset trading platform); FCA authorization required. (ii) Defines “qualifying cryptoassets” & “qualifying stablecoin”; brings staking into FPO controlled activities. (iii) Government paused bringing stablecoin payments under PSRs “for the time being”. - “Create new regulated activities… requiring firms… to be authorised… by the FCA”. “Qualifying cryptoassets… qualifying stablecoin… specified investments”. “Qualifying cryptoasset staking… added as a new activity”.For builders: Note EU: Pro: one CASP authorization → 27-state scale (though certain light-touch regulation jurisdictions may not necessarily be treated the same by regulators in other states - e.g. Bafin (German Reg body)); Con: heavier disclosures and stablecoin prudential rules; NFTs out of scope per ESMA overview. Ambiguity under MiCA as to whether DeFi is excluded - may have regulatory updates regarding DeFi in the future as European Commission is examining this.UK: Pro: clear path via FSMA-style approval; Con: still early; marketing rules strict; staking explicitly supervised.UK broker/custodian: Need FCA authorization to “operate a cryptoasset trading platform”; can approve own promotions once authorized (FPO change).For investors: EU Pro: strong consumer protection and a public MiCA register (white papers, CASPs); EU Con: some tokens may face tougher restrictions under MiCA titles. UK Pro: integration with existing market-abuse and disclosure frameworks; UK Con: timing—rolling implementation; stablecoin payments perimeter deferred.For employees: Con: paperwork-heavy environment; multi-jurisdiction ops still require localization.