Crypto exchange Tokenize Xchange to shut down Singapore operations
Tokenize Xchange founder and chief executive Hong Qi Yu declined to comment on why the firm was denied a licence by the MAS.
SINGAPORE – Cryptocurrency exchange Tokenize Xchange will cease its operations here from September 30, just over a year after raising US$11.5 million (S$14.9 million) in funding and announcing plans to ramp up hiring.
The Singapore-headquartered firm said on July 20 that it will shut down the business following the Monetary Authority of Singapore's (MAS) decision not to grant it a licence to offer digital payment token services here.
Tokenize was previously operating under an exemption.
The firm said it will shift its operations to Labuan, a federal territory in Malaysia, where it is in the process of acquiring a company that holds a Digital Financial Services License issued by the Labuan Financial Services Authority. The deal is expected to close by September 30.
It will also seek regulatory approval from the Abu Dhabi Global Market, an international financial centre and free economic zone located in Abu Dhabi, the capital of the United Arab Emirates.
Tokenize said all 15 of its employees in Singapore have been given notice and will leave the company by September 30.
When contacted, Tokenize founder and chief executive Hong Qi Yu declined to comment on why the firm was denied a licence by the MAS.
But he told The Straits Times on July 20 that Labuan will allow Tokenize to operate under a 'recognised regulatory framework tailored for cross-border digital asset services'.
'(Labuan) also offers greater flexibility, tax efficiency, and access to international markets, supporting the platform's global growth ambitions,' he said.
Tokenize said its Singapore customers can no longer buy or sell cryptocurrencies on its platform, and may only transfer their cryptocurrency holdings to other exchanges, where they can convert them to cash and make withdrawals.
But users can continue to withdraw cash directly from the exchange based on the Singapore dollar value of each user's portfolio, which includes both fiat and cryptocurrency holdings
This value, viewable in users' wallets, determines the withdrawal tier they are placed in under a phased schedule.
Users with portfolios below $10,000 have been able to withdraw the cash portion of their holdings and transfer their cryptocurrencies to other exchanges since July 17.
Those with portfolios between $10,000 and $99,999 may do so from August 1, while users with $100,000 and above can start from September 1. All withdrawals and transfers must be completed by September 30.
ST has reached out to the MAS for comment.
While Tokenize serves retail and institutional investors in Singapore and overseas - including Malaysia and Vietnam - its exit from the Republic comes after the MAS said on June 6 that digital token service providers targeting only overseas customers
must be licensed by June 30 or cease operations .
ST understands that the move has triggered an exodus of unlicensed cryptocurrency exchanges from Singapore. More than 500 staff - from management to junior levels across firms supporting the Republic's fintech ecosystem - are expected to relocate to the United Arab Emirates or Hong Kong, where regulators are seen to take a softer stance on digital assets.
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