SBI Group Crypto Arm Wins Singapore Securities License

SBI Digital Markets joins a handful of firms offering institutional clients custody services for crypto securities across Singapore


Source: Shutterstock


key takeaways

  • The license will allow SBI Digital Markets to advise on corporate finance, dealing in capital markets products and provide custodial services
  • MAS’ stance towards firms servicing institutional clients of crypto contrasts its approach to protecting retail investors

A crypto-focused subsidiary of Japanese financial services giant SBI Group has received the regulatory nod to offer its securities to institutional clients in Singapore.

SBI Digital Markets, which operates under Tokyo-based SBI Digital Asset Holdings, said its capital markets services (CMS) license will allow it to advise on corporate finance, deal in capital markets products and provide custodial services.

The Monetary Authority of Singapore (MAS), also the region’s central bank, granted the license following in-principle approval given in May, according to a statement on Thursday.

Businesses are required to hold a CMS license to conduct activities regulated under the Securities and Futures Act which, among other areas, includes fund management and product financing.

SBI Digital Markets joins a handful of other companies in Singapore offering custodial services to institutional investors tailored for crypto assets.

While seemingly more receptive to institutional business within the island-city-state, MAS has stiffened its approach to retail crypto investment following the collapse of Terra in May.

Now-defunct crypto hedge fund firm Three Arrows Capital, which had exposure to the algorithmic stablecoin throughout its demise, had been headquartered in Singapore since 2013. Its founders were reportedly planning to relocate primary operations to Dubai earlier this year.

In April, MAS closed a loophole that had allowed virtual asset service providers to offer their business abroad while evading oversight at home.

“Singapore’s financial regulatory system is among the most respected in the world for its rigor and transparency,” SBI Digital Markets’ CEO Winston Quek said in the statement.

MAS chair Tharman Shanmugaratnam in July proposed introducing customer suitability tests while restricting their use of leverage and credit facilities. At the time, digital asset markets were reeling from cascading liquidations which ultimately spurred bankruptcies of crypto lenders Celsius and Voyager.

The regulator has often voiced its concerns around the new asset class, pointing to extreme periods of volatility and an increase in shady practices as a means to protect mom-and-pop investors.

And while MAS believes those limitations could help alleviate financial harm, Shanmugaratnam conceded late last month that banning retail access to crypto assets wouldn’t work.

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