ADDX is first Singapore financial institution to recognize crypto assets of accredited investors
Tokai Tokyo-backed private market exchange ADDX has become the first financial institution in Singapore to recognize cryptocurrency assets for the purposes of onboarding accredited investors. ADDX can onboard such investors from all over the world. Under Monetary Authority of Singapore (MAS) regulations, only accredited investors have access to more sophisticated investment products in the private markets.
This paves the way for more individuals to qualify for accredited investor status. They can thereby participate in more sophisticated investment opportunities in the private markets, which tend to be more resilient in times of market volatility.
Under Singapore’s regulatory regime, individuals have to meet any one of three criteria in order to qualify as accredited investors:
- Annual income exceeds SGD 300,000, OR
- Net financial assets exceed SGD 1 million, OR
- Net personal assets exceed SGD 2 million
Before ADDX’s move, only traditional assets like stocks, bonds, cash and real estate could be used for an individual to become verified as an accredited investor.
While crypto assets are not currently recognized as income or financial assets, they can be recognized under the third category of net personal assets — with ADDX being the first to do so.
In line with regulations, ADDX will implement appropriate risk management measures that take into account the price volatility of crypto assets. For example, ADDX will apply a haircut when valuing the assets.
As part of its process for verifying accredited investors, ADDX will begin recognizing three coins — Bitcoin, Ether and USDC. The haircut ADDX will apply when calculating the value of these crypto holdings is 50% for Bitcoin or Ether and 10% for USDC. These coins and discount rates will be reviewed at regular intervals and may be revised as market conditions change. To qualify as accredited investors, individuals can provide documents to show that the value of their net personal assets meets the SGD 2 million threshold after the inclusion of crypto assets with the haircut applied.
Founded in 2017, ADDX is Asia’s largest private market exchange. Using blockchain and smart contract technology, ADDX tokenizes private market investments such as private equity funds, hedge funds, pre-IPO equity and bonds. The resulting efficiency allows the platform to reduce minimum investment sizes from USD 1 million to USD 20,000.
ADDX has listed more than 30 deals on its platform involving blue-chip names such as Hamilton Lane, Partners Group, Investcorp, Singtel, UOB, CGS-CIMB, as well as Temasek-owned entities Mapletree, Azalea and SeaTown. The Singapore Exchange (SGX) backed company is regulated by the Monetary Authority of Singapore (MAS) as a digital securities exchange.
ADDX’s pre-Series B fundraise of USD 58 million included Tokai Tokyo Financial Holdings, the Development Bank of Japan, and JIC Venture Growth Investments as investors.
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