Singapore cryptocoin firm banks with Japan as local account shut
November 21 2017 09:49 PM
The headquarters of the Monetary Authority of Singapore. The MAS doesn’t regulate cryptocurrency directly, although it requires intermediaries such as exchange operators to comply with rules to combat money laundering.


Quoine Pte, a cryptocoin exchange operator founded in Singapore, said it’s now routing customers’ payments to Japan, where the firm banks with lenders including Mitsubishi UFJ Financial Group after an account in the city-state was closed.
A local branch of CIMB Group Holdings gave the company three weeks’ notice before terminating its account at the end of September, Quoine chief executive officer Mike Kayamori said. Customers now have to wire their payments to accounts at the firm in Japan, he said in an interview last week.
Quoine joins about 10 firms specialising in cryptocurrency and payments services whose bank accounts have been shut in Singapore, where the financial regulator oversees only some activities related to the industry. Japanese authorities are taking a more active stance, granting licenses to 11 exchange operators in September, including Quoine.
“Japan is on the forefront of cryptocurrency and fintech innovations, and banks are following the Financial Services Agency,” Kayamori said. “So from that we address all of our global customers from Japan.”
Quoine also has accounts with other Japanese banks including Sumitomo Mitsui Financial Group, he said. Tokyo-based MUFG and Sumitomo Mitsui are Japan’s biggest lenders by market value.
Japan’s FSA introduced its cryptocurrency exchange registration system this year to ensure operators meet risk management standards, manage funds appropriately and check identities to prevent money laundering and terrorism financing.
Kayamori said the regulator is keen to avoid a repeat of the 2014 collapse of Tokyo-based Mt Gox, which once was the world’s largest bitcoin exchange.
The Monetary Authority of Singapore doesn’t regulate cryptocurrency directly, although it requires intermediaries such as exchange operators to comply with rules to combat money laundering and terrorism funding.
A spokesman for CIMB wasn’t immediately able to comment. Spokesmen for MUFG and Sumitomo Mitsui declined to comment.
Quoine’s account closure in Singapore is part of a “bank- wide issue” that’s not only confined to Kuala Lumpur-based CIMB and local lenders, Kayamori said. The firm still has another account for operations in Singapore, he said, declining to disclose the bank’s name. Quoine handled $6bn of transactions in October.
Banks in Singapore “have a zero-tolerance policy towards cryptocurrency and blockchain companies,” Kayamori said. “Banks say no now because it’s kind of in between, it’s a gray area.” Still, Singapore has shown recent signs of opening up to the industry. 
The MAS said November 14 it intends to regulate trading of virtual coins to fiat currencies under a new payments framework. It’s also open to the idea of trialling some initial coin offerings in a regulatory sandbox, Chief Fintech Officer Sopnendu Mohanty said last week.
Kayamori said Quoine, which was incorporated in Singapore in 2014, hopes that banks in the country will accept digital-coin firms once they’re regulated by the MAS. He expects to see new rules and guidelines in the city-state by the end of next year.
“Regulation of cryptocurrencies or their intermediaries by governments will help – rather than keeping them outside of the ecosystem,” said Ali Burney, counsel at Clifford Chance in Singapore. “Because when they’re outside of the regulatory system is when they’re uncontrolled, unseen.”

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