- Luno now has two corporate-level banking accounts in Singapore.
- Banks are apprehensive about trusting the cryptocurrency industry as a result of potential criminal activity on the blockchain.
The cryptocurrency industry has gone through its fair share of troubles through the years, including an exchange called Luno. Luno moved out of Singapore and into London in 2017, stopping their services for the former at the same time. However, based on reports from Bloomberg, the exchange appears to be ready to re-establish itself in the country, resuming their services with two recently opened bank accounts.
Residents in Singapore will have the opportunity to engage once again with their digital wallet and trading services. The head of the Asia office, Vijay Ayyar, and the country manager, Sherry Goh, remarked that the new bank accounts for the corporation would make it possible to hold money from investors and pay salaries, though the team chose to omit the name of the bank in their interview.
Luno was originally founded in 2013 as BitX in Singapore, making them one of the many cryptocurrency companies that found themselves shuttered, due to the concerns of domestic lenders. The article in Bloomberg states that lenders were worried about the possibility of criminal activity, including potential illicit money laundering.
In 2016, the companies were accepted into the regulatory sandbox of the UK Financial Conduct Authority. This acceptance made it possible for the firm to test out the remittance service, which was based in cryptocurrency, with the use of British pounds. Ever since, Luno has had multiple opportunities to expand in Europe and Africa. Ayyar noted, “Singapore remains strategic and crucial to our operations.”
It is worth knowing that the bank accounts in Singapore do not allow Luno to hold money for clients, which is a major concern for the platform as it tries to thrive, according to Goh. Goh originally joined the firm last year, though was previously employed by the Monetary Authority of Singapore.
She explained that the new accounts are “a good start,” but the work is far from over.
“The bank situation shall be resolved soon, because that is core and fundamental to getting crypto exchanges and their business up and running.”
Presently, the money of Luno’s clients ultimately is dealt with through a stored-value facility without the banking services available, according to Ayyar and Goh.
Largely, banks have been resistant to supporting any crypto-focused firm, considering the anonymous nature of the transactions in the industry. In the worst-case scenario, this anonymity can allow criminals to infiltrate the market and perform illicit transactions, which could leave the financial institutions liable.
Companies that are involved with the industry already are working to convince the regulators and banks alike that they are trustworthy. An initiative is already in the works by the Association of Cryptocurrency Enterprises and Startups Singapore, hoping to establish some kind of standard for the industry that could bring these two sides together. One of the contributors to the industry group is Luno.
Over the course of the next year, any platform that buys sells, or trades cryptocurrency will have to abide by the regulations of the Payment Services Act, which was only recently enacted as the new standard. Luno is welcoming to this move, which may help with the risks that banks are concerned about, rather than issuing a country-wide ban on the industry.