Some cryptocurrency firms had their Singapore bank accounts closed

The complaints illustrate some of the difficulties faced by cryptocurrency firms at a time when the sector is under growing scrutiny around the world.
The complaints illustrate some of the difficulties faced by cryptocurrency firms at a time when the sector is under growing scrutiny around the world. PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - Singapore banks have closed accounts of several firms which specialise in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.

Noting that cryptocurrency firms have had similar problems with banks in other countries, the head of Singapore's Cryptocurrency and Blockchain Industry Association, or Access, asked the Government to step in.

"From our analysis, it appears to be common among leading FinTech hubs," Access chairman Anson Zeall said in an e-mailed statement. "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."

Mr Zeall said his organisation had heard from 10 companies which had encountered problems with their banking relationships in Singapore. The banks did not give a reason for their action, he added.

The complaints illustrate some of the difficulties faced by cryptocurrency firms at a time when the sector is under growing scrutiny around the world. China has said it will halt exchange trading of cryptocurrencies by the end of the month.

JPMorgan Chase chief executive officer Jamie Dimon recently described the cryptocurrency bitcoin as a fraud and said he would fire any employee trading it for being "stupid".

The Monetary Authority of Singapore (MAS), the country's central bank, said in a statement that it does not interfere with commercial decisions taken by banks, "including those in relation to the establishment and termination of business relationships".

Banks are expected to establish suitable procedures and controls, including those governing customer transactions and relationships, and to comply with customer due diligence requirements of MAS rules on preventing money laundering and the financing of terrorism, the statement added.

Mr Chia Hock Lai, president of the Singapore Fintech Association, which has broader membership than Access, said some of his organisation's members also experienced account closures, though he did not provide figures.

Neither organisation named the banks which had closed their member firms' accounts, but Access said the action had been taken by a "range of financial institutions". Access has 106 members and the Fintech Association has 185, though the two organisations said some companies belong to both groups.

The MAS has said it will regulate the offer or issue of digital tokens if they constitute products regulated under the Securities and Futures Act. It does not regulate virtual currencies per se, a similar position to that taken by central banks and regulators in other countries.

Yesterday, the MAS also said that it "remains committed to developing Singapore as a reputable financial centre and fintech hub. It is important to recognise that sustaining Singapore's hub status requires pairing a progressive and nurturing environment for fintechs together with strong controls to mitigate risks such as fraud and money laundering".

It said: "We must be mindful that new technological developments and products could bring with them new areas of risks, which the financial industry and regulatory authorities should pay heed to".

The spokesman said: "Maintaining Singapore's reputation as a trusted hub will allow all players (traditional and disruptors) to flourish."