Xchange Operations Halt in Singapore Following Denied License
In a significant move, the cryptocurrency exchange Tokenize Xchange has announced that it will be ceasing operations in Singapore by September 30. This decision comes after the Monetary Authority of Singapore (MAS) denied the company a license to provide digital payment token services.
The regulatory rejection marks a setback for Tokenize Xchange, which had been serving retail and institutional investors across Singapore, Malaysia, and Vietnam. The exchange had been operating under a regulatory exemption before being denied a full license.
Following the denial, all 15 employees of Tokenize Xchange in Singapore have been given notice and will leave the company by the end of September. The shutdown of Tokenize Xchange is part of a broader exodus of unlicensed cryptocurrency exchanges from Singapore following MAS's June 6 announcement.
In a bid to continue its operations, Tokenize Xchange is relocating its operations to Labuan, a federal territory in Malaysia. The Labuan Financial Services Authority (Labuan FSA) has granted the company a license for digital financial services in Labuan.
To facilitate the transition, Tokenize Xchange has implemented a phased withdrawal schedule based on portfolio size. Users with holdings below $10,000 can withdraw since July 17, those with $10,000-$99,999 can withdraw from August 1, and customers with $100,000 or more can begin withdrawals from September 1. All withdrawals and transfers must be completed by the shutdown date.
The regulatory crackdown has triggered significant job losses across Singapore's fintech sector. However, Tokenize Xchange is expected to relocate more than 500 staff, from management to junior levels, to jurisdictions like the UAE or Hong Kong.
The closure of Tokenize Xchange in Singapore raises concerns about the city-state's ability to maintain its position as a regional fintech hub. Critics argue that the regulatory environment is driving away digital asset businesses, potentially harming Singapore's status as a global fintech leader.
Tokenize Xchange is not the first cryptocurrency exchange to face regulatory challenges in Singapore. In June, the MAS ordered the closure of cryptocurrency exchange Quoine Pte Ltd for failing to comply with anti-money laundering regulations.
As the cryptocurrency industry continues to evolve, regulatory bodies around the world are grappling with how to effectively oversee digital asset exchanges. The situation in Singapore serves as a reminder of the importance of clear and consistent regulations to support the growth of this burgeoning industry.
In the meantime, Singapore customers can now only transfer their cryptocurrency holdings to other exchanges or withdraw cash based on their portfolio values. It is advised that they complete all withdrawals and transfers by the shutdown date to avoid any potential issues.
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