The Monetary Authority of Singapore (MAS) recently granted cryptocurrency platform Coinhako a Major Payment Institution (MPI) license to offer Digital Payment Token (DPT) Services under the Payment Services Act (PSA). The license was one of only 5 to be issued by MAS over the course of the last year to Singapore-based exchanges, among them Sygna client Independent Reserve, and served to reinforce Singapore’s commitment to cementing its global reputation as a well-regulated destination for crypto services.
This article serves as a case study on the Coinhako and Sygna partnership, with input provided by Fiona Choong VP of Compliance, Coinhako and Elsa Madrolle, CoolBitX’s Managing Director International.
What were Coinhako’s challenges in complying with the travel rule and how did Sygna address those problems?
Fiona: Various Virtual Asset Service Providers (VASPs), also known locally as DPT service providers, might implement different travel rule protocols. Hence, one of the key challenges was to create a framework where Coinhako has sufficient coverage in communicating with other VASPs. As Sygna has onboarded a handful of local VASPs, partnering with Sygna enables us to extend the coverage that we seek.
Elsa: Several challenges: multiple travel rule protocols in the market – Sygna has a strong and growing presence in markets where TR regulation is established and is already interoperable with some other protocols, which expands the footprint.
Another challenge is the sunrise issue – Sygna addresses each scenario including when counterparties may have no TR protocol implemented at all because they are in an unregulated region.
What deciding factors brought Coinhako to choose Sygna in the first place?
Fiona: One of our strategies for travel rule integration was to implement as many travel rule solutions as possible and to expand our coverage of VASPs we can transact with. With Sygna satisfying the requirements set forth by the various regulatory bodies, it’s only natural that we adopted Sygna as one of our travel rule solutions. It helps that Sygna has a streamlined and easy-to-use user interface, facilitating ease of communication for Coinhako with other exchanges and platforms.
Elsa: Sygna Bridge FATF compliance was independently reviewed by various industry bodies and all Sygna products are ISO27001 certified. This means our Coinhako implementation was fast, thanks in part to a streamlined interface.
What are Coinhako’s thoughts on this licensing experience?
Fiona: Being granted the formal approval from MAS to operate as a DPT service provider is an affirmation of the good work that we are doing. Our various teams have been working hard and tirelessly to ensure that Coinhako meets all of the requirements put forth by the regulatory bodies. The journey was not easy but it was definitely worth it.
Elsa: It’s important to choose your partners carefully. AML compliance is a key component of the licensing journey and each function is a specialty best outsourced to strong partners that are familiar to regulators since all processes are scrutinized.
What is Coinhako’s next step in AML compliance?
Fiona: Coinhako has been working closely, and will continue to work with the local and relevant international regulatory bodies to ensure that we have robust protocols, frameworks, and policies in place to provide a world-class compliant platform for our users to access the crypto-economy
Elsa: We expect regulation to keep evolving and are confident that our partners are well-positioned to evolve alongside us. We are thankful to have played a role in the licensing of such a strong client as Coinhako.