Singapore’s ADDX Recognizes Crypto for Accredited Investors
ADDX said it has become Singapore’s first financial institution to allow investors to gain accredited status by way of crypto
Singapore skyline. Source: Shutterstock
key takeaways
- Cryptocurrency can be used to deem an individual as an accredited investor in Singapore recognized as net personal assets
- An accredited investor needs to meet one of three criteria above a particular financial threshold to qualify
Capital markets platform ADDX said Wednesday it has become the first financial institution in Singapore to recognize cryptocurrency for the purposes of onboarding accredited investors.
In a statement, ADDX said it will begin recognizing bitcoin, ether and USDC for individuals as part of the city–island-state’s “accredited investor” status. Under Singapore law, investors seeking accreditation are required to meet a certain threshold to be granted access to particular financial products.
An accredited investor is an individual with a special status under financial regulation laws with differing regulations depending on the country or jurisdiction.
One of three criteria qualify an investor for such a status in Singapore including if their income in the previous 12 months exceeds SGD 300,000 (US$218,000), or their net worth of financial assets exceeds SGD 1 million (US$727,000). A third option, that an individual’s personal assets exceed SGD 2 million (US$1.45 million), also counts.
Cryptocurrency is not currently recognized within the city-island-state as either income or financial assets though they are recognized as net personal assets. ADDX said it will implement appropriate risk management measures within the eyes of the law, taking into account price volatility.
Monetary Authority of Singapore-regulated ADDX also said it will only recognize cryptos with a higher market capitalization and will apply a discount rate when valuing the assets to offset any potential risk.
“With a large minority of investors owning crypto, it is reasonable for these digital assets to be recognized as a part of one’s portfolio,” said ADDX’s CEO Oi-Yee Choo in the statement. “Recognizing crypto holdings helps us to serve a much wider segment of investors.”
Founded in 2017 with operations commencing in 2020, ADDX has grown to become one of Southeast Asia’s largest private market platforms by total trading volume, offering assets not readily available on public exchanges.
Leveraging the use of blockchain tech and smart contracts, the platform tokenizes a wide array of assets from equities to bonds as well as pre-IPO equity and hedge funds.
Choo added that reaching an understanding between crypto tech and traditional finance had positioned the firm ahead of typical offerings by enabling it to bridge two worlds.
Choo was appointed as the platform’s head in March in a move from UBS, where she was charged with leading the bank’s investments in Singapore.
“Investors increasingly expect a seamless view of their complete holdings because their traditional wealth and crypto wealth ultimately belong to a single portfolio,” she said. “In time to come, we are likely to enable customers to fund their investment wallets with cryptocurrencies and to convert their assets between fiat currencies and crypto.”
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