The ‘Singapore Collapse’ Went Viral: Here’s What’s Actually Happening

What Happened

Another engine drove capital into Singapore: Xi Jinping’s anti-corruption campaign, launched after his 2012 ascension—the most extensive in Chinese Communist Party history.

According to Germany’s Mercator Institute for China Studies (MERICS), “Since 2015, the specter of capital flight has been haunting the Chinese economy. Faced with the threat of currency devaluation and an aggressive anti-corruption campaign, investors and savers began moving their wealth out of China. The outflow was so large that the central bank was forced to spend more than $1 trillion of its foreign exchange reserves to defend the exchange rate.”

Japan had already learned painful lessons. In 2014, Tokyo-based Mt. Gox—then handling over 70% of global Bitcoin transactions—collapsed after hackers stole approximately $500 million worth of Bitcoin. Japan’s Financial Services Agency (JFSA) responded by introducing the world’s first registration system for cryptocurrency exchanges in 2016. When another Japanese crypto exchange, Coincheck, lost $534 million in NEM tokens in January 2018, regulations tightened further.

Singapore took a different approach. While it introduced the Payment Services Act (PSA) in 2019, the framework remained relatively flexible. Foreign crypto firms were granted regulatory exemptions allowing them to operate temporarily without licenses, provided they didn’t serve Singapore retail investors. The industry consensus became: “If you want to do blockchain business in Asia, Singapore is the place.”

Market Context

Chinese-language social media has been buzzing with predictions of Singapore’s decline. Posts claim that luxury brands are fleeing Marina Bay Sands, and that Orchard Road’s Christmas decorations looked sparse this holiday season. Some mockingly call Singapore “洗钱坡” (Xǐqiánpō, “money laundering slope”)—a sardonic play on the city-state’s Mandarin name “新加坡” (Xīnjiāpō)—forecasting the collapse of a city abandoned by speculative capital.

But the data tells a different story. According to Euromonitor International, Singapore’s luxury market is projected to grow 7-9% in 2025, reaching S$13.9 billion—outpacing Japan, China, and South Korea. This isn’t a collapse. It’s restructuring. Understanding this transformation requires going back to 2019.

The Anti-Corruption Campaign and Chinese Capital Flight

South Korea went through its own reckoning. The 2017 crypto boom brought a flood of speculative demand, creating the notorious “kimchi premium“—where Bitcoin prices in Korea traded significantly higher than global markets. Authorities responded with tightened regulations, a stance further reinforced by FATF’s 2019 Travel Rule recommendations requiring the sharing of customer information for transactions above certain thresholds.

The Terra-Luna collapse in May, the FTX bankruptcy in November—both had Singapore connections. Singapore-headquartered Three Arrows Capital (3AC) also went bankrupt. In 2023 came the $2.3 billion Fujian Gang money laundering scandal: ten individuals from China’s Fujian province who had entered Singapore using forged identities to launder proceeds from illegal gambling and cyber fraud.

Why It Matters

Token2049, Asia’s largest blockchain conference, relocated from Hong Kong to Singapore in 2022, driven by Hong Kong’s zero-COVID policies and regulatory risks in China. Attendance surged from 7,000 in 2022 to 20,000 in 2024, reaching a record-breaking 25,000 in 2025.

Bitget and Bybit relocated staff to Dubai and Hong Kong, putting hundreds of Singapore-based jobs at risk. A Hong Kong politician publicly stated that “Singapore firms are welcome to relocate to Hong Kong.”

Details

From Hong Kong to Singapore: The Great Migration of 2019

When Hong Kong‘s anti-extradition bill protests intensified in 2019, the geography of Asian finance began to shift. People used to say, “The real concern here is that people are moving their companies and their money in greater numbers to Singapore.”

Back then, 23% of companies with offices in Hong Kong were considering relocating business functions, with nine out of ten choosing Singapore as their preferred destination. When Hong Kong’s National Security Law took effect in June 2020, the exodus accelerated.

Hong Kong’s strict zero-COVID policies during the pandemic further drove financial talent and businesses toward Singapore. Assets managed by Singapore’s asset management industry doubled in just 6 years to approximately $4 trillion, with 80% of that coming from abroad. Global asset managers like BlackRock expanded their Singapore operations, while Ontario Teachers’ Pension Plan shut down its entire equity team in Hong Kong.

Under the banner of catching “tigers and flies alike,” more than 4.7 million officials have been disciplined since 2012, including 553 at ministerial rank or above. Operations “Sky Net” and “Fox Hunt” pursued fugitives across 90 countries and recovered billions in offshore assets.

Much of this money flowed into Singapore. The city-state’s family offices surged from 400 in 2020 to 1,100 by the end of 2022. The nickname “洗钱坡” (money laundering slope) emerged from this context.

The Battle for Asia’s Crypto Hub

Money laundering demand intersected with the cryptocurrency industry. Following China’s 2017 ICO restrictions and 2021 outright ban, major Chinese exchanges—including Binance, Huobi, Bybit, and OKX—relocated en masse to Singapore. Ethereum co-founder Vitalik Buterin observed that “Singapore is becoming the center of crypto communities.”

Why Singapore? Because it was the only viable answer in Asia.

The Turning Point: Terra-Luna, FTX, and the Fujian Gang

But 2022 marked a turning point for Singapore as well.

The Monetary Authority of Singapore (MAS) shifted its stance. The Digital Token Service Provider (DTSP) licensing regime, which took effect on June 30, 2025, requires all Singapore-based firms serving overseas crypto customers to obtain licenses. There was no transition period.

As of late 2025, around 35 companies hold Major Payment Institution (MPI) licenses, including Coinbase, Crypto.com, Circle, and Upbit.