Written by: Xu Yuenwen, Iris, Mann Kun Law Firm
Since 2019, a series of forward-looking policy initiatives have been continuously introduced, strongly promoting the advancement of Web3 technology. For instance, the 'Digital Economy Alliance' was formed in 2019 to vigorously promote the growth of the digital economy ecosystem; the 'Digital Payment Alliance' established in 2020 actively promotes the development and innovation of the digital payment field; and the launched 'Digital Currency Laboratory' explores the potential and applications of digital currency in depth.
These policies have spawned a large number of Web3 projects to take root and thrive in Singapore. Today, Singapore has achieved notable results in the Web3 field, giving birth to many well-known projects. Mann Kun Law Firm has compiled some representative Web3 projects in Singapore for reference.
* The following rankings are not in any particular order, arranged only by year of establishment.
Merlin Chain
#Infrastructure#Layer2
Established: 2023
Ecosystem: Bitcoin
Funding: $800 million
Project Introduction: MerlinChain, powered by Bitmap, is a Bitcoin Layer 2 solution based on the native assets, protocols, and products of Bitcoin Layer 1, making Bitcoin interesting again. MerlinChain aims to amplify the overall asset potential of the Bitcoin ecosystem by empowering Layer 1 assets, protocols, and user ecosystems on Layer 2, such as building an easily accessible metaverse based on Bitmap and developing DeFi protocols based on BRC-420 to maximize its token duality. It is a new BTCLayer2 solution supported by OKX. Its significance lies in directly addressing the core issue of Bitcoin network—scalability.
The development team of Merlin Chain, Bitmap Tech, registered a limited liability company in Texas, USA, in 2021, headquartered in Dallas. According to GitHub data, Merlin Chain has commissioned ScaleBit to conduct an audit report on its smart contracts, including manual code review and static analysis, to identify potential vulnerabilities and security issues. During the audit process, ScaleBit identified four issues of varying severity: lack of event occurrence, unused parameters, unnecessary checks, and inaccurate error codes.
AltLayer
#Infrastructure #Modular #Restaking
Established: 2022
Ecosystem: Ethereum
Funding: $21.6 million, completed $7.2 million seed round in July 2022, and $14.4 million strategic funding in February 2024.
Project Introduction: AltLayer is an open and decentralized Rollups protocol that brings together the novel concept of Restaked rollup. It utilizes existing rollups (derived from any rollup stack, such as OP Stack, Arbitrum Orbit, ZKStack, Polygon CDK, etc.) and provides enhanced security, decentralization, interoperability, and rapid finality in cryptoeconomics.
AltLayer's airdrop document specifies some specific legal terms, such as the strict requirement for users to complete KYC (Know Your Customer) certification, especially in its cooperation with Binance Launchpool, where all participants must complete identity verification when staking BNB or FDUSD to earn ALT token rewards; at the same time, airdrops are not allowed for users in sanctioned regions or countries and participation in ALT new coin mining is prohibited, including in Canada, Cuba, Crimea, Iran, Japan, New Zealand, the Netherlands, North Korea, Syria, the United States and its territories, and any non-government-controlled areas of Ukraine; additionally, the document also indicates potential regulatory and tax issues related to ALT and clarifies that the agreement is governed by the laws of the British Virgin Islands; and the airdrop document also mentions requirements for compliance with data protection and privacy regulations, such as adhering to GDPR and other data privacy laws.
DWF Labs
#CeFi#OTC#Market Maker
Established: 2022
Project Introduction: DWFLabs is a Web3 venture capital and market maker. DWFLabs provides market making, secondary market investment, early-stage investment, and OTC services for Web3 companies, as well as token listing and consulting services. DWFLabs is part of DigitalWaveFinance (DWF), one of the world's top cryptocurrency traders, trading spot and derivatives on over 40 leading exchanges. DWF is headquartered in Switzerland, with its Asia region headquarters in Singapore. It also has offices in Dubai, mainland China, and Hong Kong.
DWF Labs is headquartered in Switzerland but has an office in Singapore. According to the privacy policy document disclosed by DWF Labs, data collection and sharing are conducted based on laws and regulations, and users retain rights over their data. In particular, for users residing in the European Economic Area, DWF Labs complies with the General Data Protection Regulation (GDPR). Users have the rights to access, correct, delete, and restrict the processing of their personal data, while the company relies on lawful processing bases for handling user data, including contract fulfillment, legal compliance, and user consent.
DWF Labs requires users to complete KYC (Know Your Customer) certification on the Liquid Markets platform, including collecting and verifying user identity information, proof of address, and conducting biometric verification (such as facial recognition). These processes aim to prevent identity theft, money laundering, and other illegal activities. The KYC process has basic and enhanced versions, with the enhanced version suitable for users with higher trading limits, such as accounts withdrawing more than $1 million daily.
Additionally, DWF Labs collaborates with Sumsub for KYC and KYB certification, with Sumsub providing technical support that includes verification of various global identification documents, address verification, and database checks. It has integrated multiple layers of security and compliance measures on its platform, including anti-money laundering (AML) requirements and adherence to the Travel Rule to ensure its global operations comply with local regulatory standards.
Aethir
#Infrastructure #DePIN #Cloud Computing #Artificial Intelligence
Established: 2022
Ecosystem: Ethereum, Arbitrum
Funding: $9 million, completed Pre-A round in July 2023
Project Introduction: Aethir is a decentralized real-time rendering network that unlocks content accessibility in the metaverse. Aethir builds scalable, decentralized cloud infrastructure (DCI) that helps gaming and AI companies (of all sizes) deliver their products directly to consumers, regardless of their location or hardware.
Aethir has registered a foundation in Singapore, Aethir Foundation, primarily aimed at supporting the expansion of decentralized computing and the Web3 ecosystem. To ensure project compliance, Aethir Foundation has taken necessary measures to ensure its operations comply with international and Singapore legal requirements. For instance, Aethir requires users to complete KYC identity verification during its Checker Node reward and withdrawal processes to comply with anti-money laundering (AML) requirements; similarly, node operators need to complete KYC during node sales and operations. Additionally, Aethir's terms explicitly restrict user behavior to comply with applicable laws and regulations, such as prohibiting the use of unauthorized software or engaging in illegal content posting. These terms also cover intellectual property and feedback ownership, ensuring the platform's legitimate operation. Furthermore, in certain regions, Aethir restricts participation from certain users, such as those from the United States and sanctioned countries. These measures comply with local laws and international sanctions requirements, ensuring compliance with legal provisions globally while conducting business.
Cointime
#Crypto Media
Established: 2022
Project Introduction: Cointime is a cryptocurrency news aggregation platform operated by QUANTBASE PTE. LTD. Cointime mainly provides readers with the latest cryptocurrency news, events, data, and indices. Whether it's cryptocurrency trend news, real-time price movements, in-depth industry analysis, or cutting-edge technology, readers can find it on Cointime.
zkLink
#Infrastructure#Layer2
Established: 2021
Ecosystem: Ethereum, Polygon, BNBChain, Avalanche, Arbitrum, Optimism, Base, StarkNet, ZkSync, Linea, PolygonzkEVM, Manta, opBNB
Funding: Completed $8.5 million seed round in October 2021, $10 million strategic funding in May 2023, $4.68 million public offering round in January 2024, and strategic funding in July 2024.
Project Introduction: zkLink is a transaction-centric multi-chain L2 network with unified liquidity protected by ZK-Rollups. dApps built on the zkLinkL2 network leverage seamless multi-chain liquidity to provide rapid deployment solutions for decentralized and non-custodial order books, AMM, derivatives, and NFT exchanges. zkLink operates as a trustless, permissionless, and non-custodial interoperability protocol designed to connect different blockchains, eliminate differences between different tokens, and solve the liquidity island problem formed on isolated chains.
Currently, according to public information, in the $ZKL token sale and registration process of zkLink, the company has implemented a series of compliance measures, such as requiring participants to complete KYC (Know Your Customer) identity verification, and residents of the United States, Canada, China, South Korea, and certain restricted regions are excluded to comply with relevant national regulatory requirements. Meanwhile, the zkLink platform restricts access for certain users in regions subject to economic sanctions, ensuring that service usage complies with local and international regulations, such as the economic sanction lists of Europe and the United States. This measure ensures zkLink's compliance in the global market and avoids legal risks.
zkLink provides detailed privacy policy documents to ensure compliance with data protection regulations such as GDPR. This policy stipulates the collection and processing of users' IP addresses, access data, and log information, primarily used to ensure service stability and improve user experience. Furthermore, zkLink conducts anonymous user behavior tracking to gather non-personal identifiable data for product improvement. Additionally, the policy document emphasizes user responsibilities, including ensuring the security of wallet keys and recovery phrases.
ZkLink commissioned ABDK Consulting to conduct a comprehensive review of its smart contracts and protocols. The review covered the differences between the zkLinkProtocol and Era contracts, including specific .sol files and documents and interfaces related to synchronization cost optimization. The audit identified some medium-level issues, mainly focusing on suboptimal design aspects of the code, such as parameter passing, coding call efficiency, and storage address computation, as well as some overflow and defect issues that have been resolved, along with corresponding recommendations for these issues.
SkyArk Chronicles
#GameFi
Established: 2021
Ecosystem: BNB Chain
Funding: $15 million
Project Introduction: SkyArk Chronicles is a Triple A fantasy JRPG game with interoperable NFTs. SkyArk Chronicles is a trilogy of 2 GameFi ('House of Heroes' and 'Legends Arise') and 1 SocialFi Metaverse ('Mirrorverse').
SkyArk Chronicles' developer, SkyArk Studio, is a blockchain gaming company based in Singapore, aiming to mimic the success of Hong Kong unicorn Animoca by establishing an ecosystem for incubating crypto projects and leveraging SkyArk Studio's proprietary resources.
The token system of SkyArk Chronicles includes two tokens, $SAR and $REO, which will be used in multiple scenarios within the game and metaverse, providing players with ways to participate in the game economy, purchase game items, and earn rewards. Currently, SkyArk has not officially launched the token sale.
SkyArk Chronicles has outlined compliance matters related to virtual currency in the terms on its official website.
First, to clearly define virtual currencies and commodities, indicating that virtual currencies may play the role of cryptocurrencies but do not represent securities or other investment tools, and are not registered with government entities or regulatory authorities, holders only have limited practical rights.
Secondly, strict purchase limits are set, and not everyone can participate in the purchase. Attention must be paid to the regulations of the country/region of residence, and it is only open to experienced senior purchasers with knowledge of cryptocurrency and blockchain technology, and clearly marketed, provided, and sold only to individuals who can legally do so within specific jurisdictions, not constituting regulated investments or financial products when conducted in permitted jurisdictions.
Finally, regarding jurisdictions where cryptocurrency-related transactions are explicitly prohibited or restricted, certain regions clearly prohibit or limit cryptocurrency-related trading, while others may require licenses or other regulations, allowing SkyArk to decide independently to prohibit sales of virtual currencies in those regions to ensure the game operates within a compliant framework.
Nansen
#Tools #Data & Analysis #On-Chain Data
Established: 2019
Funding: $88.2 million, completed $1.2 million seed round in October 2020, $12 million Series A in 2021, and $75 million Series B in 2021.
Project Introduction: Nansen is a blockchain analytics platform that enriches on-chain data through millions of wallet tags. Crypto investors use Nansen to discover opportunities, conduct due diligence, and protect their portfolios through its real-time dashboards and alerts.
Nansen is an analytics platform that does not directly engage end-users in cryptocurrency trading but focuses more on analytics and data mining. Additionally, the collaboration with Kaiko utilizes Kaiko's market data and Nansen's blockchain data to provide regulatory compliance reference prices for centralized exchanges (CEX) and decentralized exchanges (DEX) digital assets.
Nansen is not entirely free to use. The platform offers limited free features, but advanced analytics and data access services typically require a subscription. Users can choose from different paid plans to unlock more advanced tools and deeper on-chain data analysis. Accordingly, the Nansen on-chain data platform uses a Master Service Agreement (MSA) established by clients purchasing products and/or services to ensure compliance. The MSA clarifies the boundaries of responsibility for both parties in the transaction, such as stipulating the time, method, quality standards, etc., for product delivery, ensuring that clients receive products and services that meet their expectations. Additionally, the MSA contains relevant provisions regarding payment methods, payment deadlines, and potential refund or exchange situations. These regulations help ensure fairness and transparency in transactions, avoiding situations where disputes arise without a basis for resolution, thus safeguarding the legal rights of both the platform and the clients and ensuring compliance with relevant laws and regulations in business operations.
Mask Network
#SocialFi
Established: 2018
Ecosystem: Ethereum, Polygon, BNB Chain, Solana, Avalanche, Arbitrum, Optimism, Fantom, Gnosis Chain, Scroll, Harmony, Aurora, Conflux, Flow, Astar
Funding: Nearly $200 million
Project Introduction: Mask Network is a Web3 portal designed to connect Web2 users to Web3. By introducing a decentralized application ecosystem into traditional social networks, Mask Network provides decentralized options for features familiar to Web 2.0 users. Users can enjoy secure, decentralized social messaging, payment networks, file storage, and file sharing without leaving mainstream social media networks. The 2.0 version released by Mask Network includes a multi-chain Mask wallet, an aggregated login system for user social media accounts and Web 3.0 addresses called MaskID, and a dApp marketplace named D.Market.
The Mask Network team has an office in Singapore and conducts some management and operational activities locally. Its legal entity 'Mask Network Pte. Ltd.' has been deregistered. Therefore, Mask Network mainly operates through its affiliates and partners: Mask Network has established funds with partners such as Bonfire Union, headquartered in Singapore, to promote the development of Web3 and decentralized social networks. In addition to its commercial activities, Mask Network has established a non-profit organization, Mask Academy, to support Web3 research and education through cooperation with universities and research institutions worldwide.
Mask Network's privacy compliance measures are based on its user privacy policy, covering data management, user autonomy, and third-party DApp integration. The platform states in its privacy policy that it is only responsible for DApps developed by it, while DApp services provided by third parties are not under its direct control, thus users must bear certain risks when using these services.
Additionally, Mask Network clarifies its data encryption and privacy protection principles, ensuring that users' social information and data are well protected when using Web3 decentralized applications. At the same time, the platform adopts a self-sovereign control mechanism, where users have control over their wallets, private keys, and other information, and the platform does not store these sensitive data.
Regarding data usage permissions, Mask Network also requires users to cooperate with necessary identity verification to ensure transaction security.
Bitget
#CeFi#CEX
Established: 2018
Funding: $30 million
Project Introduction: Bitget was established in 2018 and is a cryptocurrency exchange and Web3 company. As of early 2024, Bitget serves over 100 countries and regions globally, helping over 25 million users achieve 'intelligent' trading through leading copy trading and other trading solutions.
Bitget has registered as a Virtual Asset Service Provider (VASP), particularly in countries like Poland and Lithuania. These registrations allow Bitget to legally provide cryptocurrency trading and related services in these regions, ensuring compliance with local and international financial regulatory requirements.
Regarding KYC, Bitget implemented mandatory KYC verification starting September 1, 2023. All new users must complete KYC verification to use the platform's services, such as spot trading, futures trading, and other functions. Users who have not completed KYC will only be able to perform limited operations, like withdrawals and order cancellations, after October 1, and will not be able to create new trades. This measure aims to enhance the platform's security and ensure compliance with global and regional anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements.
On the audit front, Bitget has released monthly proof of reserves (PoR) reports that demonstrate the health of its asset reserves to ensure user fund security. In 2023, these reports show that its reserve ratio remains at about 200%, far exceeding the industry standard of 100%.
Additionally, Bitget launched a $300 million audit-protected fund in 2023 to enhance compliance and transparency. The platform's protection fund primarily consists of BTC, along with a small amount of ETH and USDT. These funds are used to protect assets stored on the platform from hacking, theft, and other threats. Bitget commits not to use these funds for at least three years and maintains publicly accessible wallet addresses. The fund has recently received support, currently totaling $300 million, and is stored in seven public wallet addresses to enhance transparency.
Cryptocurrency group BGX has made a strategic investment in Hong Kong-licensed virtual asset exchange OSL's parent company—BC Technology Group (HKG: 0863), a publicly listed company, purchasing new shares worth HKD 710 million.
Paradigm
#CeFi
Established: 2018
Funding: Completed $35 million Series A funding in December 2021.
Project Introduction: Paradigm is a liquidity network for crypto derivatives traders across CeFi and DeFi. The platform provides traders with on-demand unified access to multi-asset, multi-protocol liquidity without affecting price, scale, cost, and immediacy. The company's mission is to create a platform that allows traders to trade with anyone and settle anywhere. Paradigm has the largest crypto institutional counterparty network, with over 1,000 institutional clients trading over $10 billion monthly, including hedge funds, OTC desks, lenders, structured product issuers, market makers, and prominent family offices.
In Singapore, the entity behind Paradigm is Paradigm Pte. Ltd., which focuses on liquidity provision and innovation in the digital asset market. Paradigm has also just incubated a decentralized perpetual derivatives application chain called 'Paradex', which aims to integrate its liquidity and provide a more transparent trading environment.
The relevant terms and agreements on its official website have made various efforts in compliance: explicitly restricting services to restricted individuals (including specific nationalities and sanctioned individuals); there are strict regulations on the use of systems and software, including authorized user management; emphasizing that users must use the platform in compliance and not engage in illegal operations; covering fees, duration, and termination terms; detailed provisions on confidentiality, intellectual property, etc.; clarifying the responsibilities of both parties, including the user's liability for damages and Paradigm's exemption scenarios; and stipulating that applicable Singapore laws and arbitration and other dispute resolution methods apply to ensure compliant business operation.
KuCoin
#CeFi #CEX
Established: 2017
Funding: $180 million, completed $20 million Series A funding in November 2018, $150 million funding in 2022, and $10 million strategic funding in 2022.
Project Introduction: KuCoin was established in September 2017 and is a global cryptocurrency exchange providing spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending services.
Starting July 15, 2023, KuCoin implemented mandatory KYC verification. All new users must complete KYC certification to fully access the platform's services, including spot trading, futures trading, margin trading, and other financial products. For users registered before this date but who have not completed KYC, their account functionalities will be restricted, allowing only limited actions such as selling spot orders and withdrawing funds, but not making new deposits.
While introducing KYC, KuCoin has also strengthened the management of user data security. The platform commits to using encryption and secure storage methods to protect users' personal information, ensuring data security when users submit verification information. Additionally, KuCoin continues to provide withdrawal functionality, allowing users to withdraw funds from their accounts at any time, even if they have not passed KYC.
Paxos
#CeFi #Custody #Stablecoin Issuer
Established: 2013
Funding: Approximately $535 million, completed $3.25 million in 2013, $25 million in Series A funding in 2015, $65 million in Series B funding in 2018, $142 million in Series C funding in 2020, and $300 million in Series D funding in 2021.
Paxos is a financial technology company headquartered in the United States, focusing on the blockchain and digital asset space. It issues the Pax Dollar (USDP), a stablecoin pegged 1:1 to the US dollar, and provides secure digital asset custody services to help institutional clients manage cryptocurrency assets. Additionally, Paxos has developed the blockchain infrastructure that supports its financial products, aiming to promote the integration of traditional finance and digital assets, building enterprise blockchain solutions for institutions like PayPal, Interactive Brokers, Mastercard, Bank of America, Credit Suisse, and Société Générale.
Paxos provides a variety of digital asset services, including stablecoins (such as Pax Dollar, USDP, and PayPal USD, PYUSD launched in collaboration with PayPal) and gold tokens (PAXG) through a trust company license approved by the New York State Department of Financial Services (NYDFS). With the trust company license, Paxos is able to offer regulated financial services, including custody, trading, clearing, and more, which is at a higher regulatory level than that of regular cryptocurrency exchanges or payment institutions.
Paxos announced on July 1, 2024, that its Singapore entity, Paxos Digital Singapore Pte. Ltd., received formal approval from the Monetary Authority of Singapore (MAS) and obtained a VASP license, becoming a major payment institution, allowing it to issue stablecoins in Singapore. Companies holding a VASP license must comply with specific laws and regulations to ensure compliant operations: the company follows anti-money laundering (AML) and know your customer (KYC) compliance measures to reduce the risk of financial crime; regular reporting and audits are required; and it is subject to supervision by financial regulatory authorities.
Additionally, as a digital asset custody service provider, Paxos disclosed on its official website that it has achieved bankruptcy isolation. If Paxos Trust were to go bankrupt (which is unlikely), customer assets would be protected. It states that its operations differ from banks, particularly in that it does not hold partial reserves; Paxos holds all customer assets at a 1:1 ratio, ensuring customer funds are always available for redemption and never lent out.
Mann Kun Law Firm Summary
From the above projects, although Singapore authorities have begun to promote crypto regulation and established a crypto VA license, it currently remains in a relatively open and vague regulatory state in practice. However, this also facilitates the entry of crypto industry and projects into Singapore—Singapore remains a popular global startup location.
However, for Web3 projects, compliance will inevitably be a future trend. Therefore, while developing, entrepreneurs should also cooperate to complete compliance implementation, such as financial projects obtaining relevant licenses, dApp projects ensuring compliance with data and privacy, and paying more attention to changes in Singapore's regulatory rules to avoid being affected by regulations during the hot development phase.
