KrASIA: Scores of businesses fail to win licenses from city-state’s financial regulator

KrASIA: Scores of businesses fail to win licenses from city-state’s financial regulator

Crypto entrepreneurs find Singapore is not so hospitable after all

Cryptocurrency entrepreneurs lured to Singapore by its apparent openness to the burgeoning industry are discovering just how difficult it is to legally operate in the city-state.

More than 100 of the around 170 businesses that applied for licenses to offer “digital payment token services” have now been turned down or withdrawn their applications, according to the latest figures from regulators.

And scores more face an uncertain future, operating under exemptions but amid a darkening mood over the approval process.

In early September, the Monetary Authority of Singapore (MAS) ordered Binance, one of the world’s largest crypto exchanges, to stop providing services to residents in the city-state, and last week Binance’s Singapore-only affiliate announced it also was shutting down its trading platform for the city-state. Dozens are confronting a similar fate.

Dubai-based crypto exchange Bitxmi is one of 103 companies that appear on the latest MAS list of entities whose exemptions allowing them to operate have been removed. Having set up in Singapore in late 2018, it was unsuccessful in securing a license, chief executive officer Sanjay Jain told Nikkei Asia.

“We can’t operate in Singapore,” he said. “We have an office there, but it’s just more or less—there’s one person for our accounting and legal issues.”

Jain declined to speak about why his outfit did not manage to secure a license from regulators. “That, you need to ask them,” he said.

The introduction of the licensing regime in January was cast as the next step in building a thriving crypto sector and set up a contrast with Singapore’s rival Asian financial hub, Hong Kong, which had taken a more skeptical approach to crypto businesses.

Graph by Nikkei Asia.

A spokesperson for MAS told Nikkei that it is supportive of innovation in the use of blockchain technology, which underpins cryptocurrencies, while also recognizing the risks.

“Cryptocurrencies could be abused for money laundering, terrorism financing, or proliferation financing due to the speed and cross-border nature of the transactions,” the spokesperson said. “Digital payment token service providers in Singapore … have to comply with requirements to mitigate such risks, including the need to carry out proper customer due diligence, conduct regular account reviews, and monitor and report suspicious transactions.”

Rahul Advani, Asia-Pacific policy director at blockchain company Ripple, said Singapore’s stance on digital assets has resulted in the city-state being one of the most advanced and mature nations in the field, helping foster development and innovation in the emerging industry.

“It’s very clear where digital assets and related activities lie on the risk spectrum, so you mitigate the potential of developing and investing in technology that is unregulated,” he told Nikkei.

Crypto players that raced to set up in Singapore run the spectrum from exchange platforms for trading bitcoin, Ethereum, and other tokens, through investment managers and financial advisers looking after digital asset portfolios for the wealthy, to business-to-business outfits helping corporate clients accept cryptocurrency payments.

Outfits that were operating in the country prior to the introduction of the licensing regime were granted exemptions until the outcome of their license application is known. Senior Minister Tharman Shanmugaratnam told parliament in July that there were 90 companies operating under such exemptions.

The MAS website showed that the group had shrunk to about 70 as of December 14.

So far, only three players—DBS Vickers Securities, a unit of Singapore and Southeast Asia’s largest bank, DBS Group Holdings; digital payments startup FOMO Pay; and Australia’s Independent Reserve, which offers crypto exchange services—have been listed on the MAS website as licensed entities.

Two others—Coinhako, which operates a crypto exchange platform, and TripleA, a payments company—have put out announcements themselves saying they have acquired the necessary approvals to operate.

Anndy Lian, chairman of Netherlands-registered crypto trading platform BigONE Exchange, told Nikkei that his outfit does not intend to apply for a license in Singapore presently.

“The whole process of selecting who to give the license to is not very transparent,” he said. “It gives the impression that the government is favoring big players and foreign exchanges.”

MAS has not publicly disclosed why specific crypto players were unable to obtain a permit.

But Nikkei understands that some of them did not have the capacity or infrastructure to meet the high compliance standards set out by the financial regulator to deter money laundering and financing of terrorism.

“Cryptocurrencies are currently being used to channel the earnings of everything from ransomware proceeds, the sale of narcotics to some of the most horrific crimes, including human trafficking,” said Rachel Woolley, head of financial crime at client management solutions provider Fenergo.

“Regulators have now entered this space in an effort to protect the financial services industry from illicit activity in much the same way that activity involving fiat currency must be monitored.”

MAS pointed to comments from its managing director, Ravi Menon, who has said that Singapore does not need 160 players in the crypto sector and it may be better to have “half of them” operating at very high standards.

TripleA told Nikkei that in securing its permit, it had to ensure that its operating procedures for risk assessment, customer due diligence, record-keeping, suspicious transaction reporting, auditing, and training were up to snuff.

But its CEO, Eric Barbier, said TripleA gained little insight into what exactly made the difference between success and failure.

“MAS never talks. MAS asks questions and questions and questions,” he said. “You can ask questions but they will not answer, and most regulators are like this.”

Barbier reckoned that being a business serving other businesses may have helped secure a license. “Especially for consumer-to-consumer, like consumer exchanges and so on, the risk of money laundering is very high, so they need to demonstrate to MAS that they are able to mitigate all those risks accordingly,” he said.

Peiying Chua, financial regulation partner for Singapore at the law firm Linklaters, said it is unlikely MAS is specifically favoring big, incumbent financial players: “Likely reasons for unsuccessful applicants may include a lack of track record or key personnel without adequate experience, a lack of a sustainable business model or serious adverse records relating to directors and key individuals.”

“The regulatory approach by MAS may to some degree stifle innovation in smaller entrepreneurs and sift out smaller virtual asset service providers that may not be able to comply with the regulations,” said Quek Li Fei, partner at law firm CNPLaw.

But he added it “provides a more forward-thinking approach toward encouraging legitimate innovation and entrepreneurship in cryptocurrency and digital asset businesses, with a reasonable level of protection to investors.”

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Anndy Lian Believes Blockchain Tech Drives Innovation and Productivity in Enterprise Businesses

Anndy Lian Believes Blockchain Tech Drives Innovation and Productivity in Enterprise Businesses

The World Blockchain Summit (WBS) organized by Trescon has speakers from government officials, blockchain evangelists and business leaders in the region.

The topic about Blockchain for Enterprise is discussed in one of the key panels at the summit. The panel has a good mix of Singapore blockchain experts: Anndy Lian- Member of Gyeongsangbuk-do Blockchain Special Committee, Government of the Republic of Korea and Blockchain Advisor of Asian Productivity Organisation, Elias Tan- Singapore Lead, NEO, Joseph Toh- Founder of SignKeys, Hock Yun Khoon- Partner, Blockchain Fund 1 of Tembusu Partners and Yi Ming- Partner of TRIVE.

Anndy Lian who is an advisor to intergovernmental organisations brought up a few good points during in this panel. He has urged corporations when adopting blockchain to be realistic and resourceful. Companies and people in blockchain must also keep an open mind. He believes why South Korea is successful in blockchain is due to their openness. He has seen this in Seoul, Gyeongsangbuk and Jeju especially where the governors are pushing hard for blockchain.

Anndy continued by saying “Blockchain is not everything. In order to adopt enterprise blockchain solutions, the companies need to access the need for this new technology and how they want to adopt it. Companies need to be realistic and not adopt blockchain blindly. They need to be resourceful and find the right experts to attain their blockchain vision. Blockchain technologies and companies should also work together more, collaborate often and share the knowledge with each other! Blockchain is a perfect enterprise tool for innovation and productivity if we apply the right know-how.”

Elias Tan echoed to the remarks and he said “I agree with Anndy Lian. The blockchain communities should work more together. It is not easy to get companies to understand blockchain. I faced the same issues when I deal with my family members. They do not see the need to implement blockchain. I took a long time and through numerous meeting with the family and board members to let them understand how this technology work. So when there is a chance to implement blockchain for companies, we must show them what blockchain can really do for them. We need to do our best!”

Hock Yun Khoon then went on to share some of the more successful case studies that are impactful for industries such as airlines, supply chain, logistics, medical and finance. He sees that blockchain technology is the way forward and companies should start to study about it and we will see a higher adoption rate in the near future.

Off the stage, Blockcast.cc has also managed to catch hold of some delegates to ask them about how they feel about the blockchain industry. Singapore delegations such as Manoj Thacker of Sky & Institute of Blockchain Singapore, Jocelyn Yu of Dgroup, Haw Leng of RegTech, Janet Lee of Venture Capital Network were also present and all of them are very positive about the new technology and want to see more truly Singapore driven blockchain initiatives.

“I flew in from Mauritius for the summit and I am glad to see like-minded people, I had good discussions with some of the panelists too. Coming here gives me more confidence and proved that South East Asia such as Singapore is a good place to further develop the blockchain industry.” Sebastien Ng, Founder of Masternode Ventures said.

More than 300 delegates have attended this event at Marina Bay Sands Singapore on 25 July 2019. WBS has provided a platform for regional and international organizations who are interested in the blockchain technologies to interact and exchange ideas. We look forward to the next WBS.

 

About WBS

World Blockchain Summit is South Asia’smost elite gathering of curated investors. Marching ahead as one of the most forward-thinking crypto development zones, this 13th global edition and second leg is in line with ‘Smart Nation’ initiative that represents a large-scale effort by the Singapore government.

About Blockcast.cc

Blockcast.cc is a broadcasting news source for the blockchain community. Founded in Singapore and has a network of contributors in China, Hong Kong, South Korea and Malaysia. They aim to bring you the latest blockchain insights across the globe.

Media Contacts

Company: Blockcast.cc

Contact Person: Melody Chan

Email: [email protected]

Website: www.blockcast.cc

 

Source: https://blockcast.cc/editors-picks/anndy-lian-believes-blockchain-tech-drives-innovation-and-productivity-in-enterprise-businesses/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Anndy Lian, CEO of LINFINITY drives digital transformation further with blockchain for a better future

Anndy Lian, CEO of LINFINITY drives digital transformation further with blockchain for a better future
LINFINITY, one of the most active company in the blockchain supply chain industry builds on their vision of using smarter machines and blockchain technology to create a more sustainable and complete ecosystem at Korea Future Forum (KFF) 2019.
KFF, organized by News1, MoneyToday and the UN Future Forum has invited world’s most renowned professionals to look at trends that will dominate the future society, and discuss challenges and solutions to the society.

Mr Anndy Lian, CEO of LINFINITY is one of the speaker at the forum who spoke about their business in the supply chain and how smart machines can aid the future with the usage of blockchain technology.
“Supply chains play a very important role in the economy and the usage of blockchain technology can bridge some of the gaps thus forming a sustainable ecosystem. In order to do so, we need to further digitize this industry. Smart machineries can give us more data points, while blockchain captures the data to give more transparency and security. A win-win digital transformation strategy is vital and a better future in the making.”
Digital Transformation creating a paradigm shift in markets is leading future industry and political, economic, sociocultural innovations. It ultimately seeks to foster an ecosystem that allows humanity prosper and benefit from efficiency. KFF 2019 delivers the most relevant information on what kind of changes individuals, businesses, and countries will face through the organic relationship between the technologies that the fourth industrial revolution would bring.
Guest speakers at KFF have also shared their knowledge and insights to give prospects about the present and future global challenges the world is facing, and to actively present frameworks for thinking and cooperation that can lead humanity into coexistence and co-prosperity.
Jungsik Suh, Senior Vice President of ICT Division at Hyundai Motor Group also presented the “Hyundai Motors’ Connected Car Strategy” which gives us a glimpse of the future and how connected we are on the roads with the their new technologies.
Blockchain technologies and cryptocurrencies are one of the key topics in this forum. Notable blockchain experts such as Brock Pierce Chairman of the Board at the Bitcoin Foundation also gave us a complete overview of the current cryptocurrency market and why 2019 is the year of popularization for crypto. Nitin Gaur Director of IBM WW Digital Asset Labs also shared his vision for the future of public and private blockchain usage.
“New digital technologies such as Big Data, Artificial Intelligence (AI), self-driving cars and Blockchain are shaking the traditional foundations of society and industry to the core. We need to look at the future and plan for the future. Blockchain is definitely one of the most important aspects for our future”, Professor Young-Sook Park, KFF Co-organizer, Futurist and CEO of The UN Future Forum stated.
LINFINITY will continue to work closely with the new digital technologies and futurists to create a more sustainable supply chain ecosystem.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j