Reports from Singapore indicate bank accounts associated with cryptocurrency companies have been frozen by regional banks.
In response, Singapore's Cryptocurrency and Blockchain Industry Association, also known as ACCESS, will seek government intervention. According to ACCESS chairman Anson Zeall, the organization has received word from 10 companies that are experiencing issues with Singapore banks. ACCESS has a total of 106 members. Zeall said, "From our analysis, it appears to be common among leading FinTech hubs. If this is the case, we would urge Singapore to take a leadership role and demonstrate how to come to an effective resolution among all parties.”
Exchanges of cryptocurrencies have also been plagued by similar issues with banks, such as Taiwan-based Bitfinex and Hong Kong-based OKCoin. In April of 2017, wire transfers for the two companies came to a screeching halt due to concerns about liquidity and security.
A statement from Singapore’s central bank, the Monetary Authority of Singapore (MAS), would seem to back up the banks who have decided to issue account closures. MAS said that it would refrain from interfering in the actions taken by the banks in question, "including those in relation to the establishment and termination of business relationships.”
While no names or figures were provided, the Singapore FinTech Association (SFA) also has members whose accounts have been closed by banks, according to its president, Chia Hock Lai. In total, SFA has 185 members, but it should be noted that some of its members experiencing banking issues have dual membership with ACCESS.
In at least one instance, ambiguity is stripped away. The details are clear in the case of Southeast Asian bank DBS Group Holdings Ltd (DBS) and CoinHako, a wallet and cryptocurrency exchange. According to the exchange, the bank closed accounts for CoinHako without providing any reason. Now CoinHako cannot process deposits or withdrawals in Singapore dollars.
MAS guidelines may have been the catalyst for the account closure, according to CoinHako co-founder Yusho Liu. He said the exchange will "go the extra mile to meet compliance standards."
“Even though we don’t fit anywhere in the current regulatory framework, CoinHako is fully committed to working towards a common consensus with the banks to allow for a more conducive environment going forward.”
While DBS did not relate any comments regarding CoinHako, it did state that account closure decisions are dependent upon multiple factors including "failure to maintain the account in good standing, failure to provide timely and accurate information, unexplained inconsistencies in account behavior, or unacceptable risk of criminal or terrorist behavior.”
Additional guidelines from MAS indicate that it will seek to regulate token offering-based crowdfunding efforts in the event that those issuances of tokens can be defined as a product currently regulated under Singapore's Securities and Futures Act.
Singapore continues to be an innovation hub for blockchain technology, which MAS supports as an organizer for a FinTech festival scheduled to take place in November. MAS has also done trials with distributed ledgers and a central bank digital currency intended for cross-border payments.
MAS stated that it "remains committed to developing Singapore as a reputable financial center and fintech hub." To do this, MAS said the approach must pair a nurturing environment alongside strong controls to mitigate risk factors that include fraud and money laundering.
The statement continues:
“We must be mindful that new technological developments and products bring with them new areas of risks, which the financial industry and regulatory authorities should pay heed to.”