OKX Singapore CEO Discusses Key Challenges in Securing Major Payment Institution License

OKX Singapore CEO Discusses Key Challenges in Securing Major Payment Institution License

OKX Singapore CEO, Gracie Lin, has shed light on the critical and challenging process of obtaining a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS). In an interview with CoinDesk, Lin emphasized that securing a custodial bank account was the most significant hurdle in obtaining the full license.

Securing a Custodian Bank: The Most Crucial Step

Lin highlighted that custodians play a vital role in the regulatory process, especially under MAS’s rigorous standards, considered a gold standard in Asia. According to Lin, securing the support of a bank was essential for moving from in-principle approval to a full MPI license.

“The most important and sometimes the most difficult condition is making the bank comfortable with your business model, risk management, and compliance controls,” Lin explained. “Fulfilling this requirement was a major milestone in our licensing journey.”

This requirement for custodians is not exclusive to Singapore. Japan’s stringent post-Mt. Gox rules have set an international precedent for requiring independent third-party custodians for safeguarding customer assets.

Quick KYC via Singapore’s Digital Identity System

What sets Singapore apart, according to Lin, is its Singpass digital identity system. This allows OKX Singapore to streamline the KYC (Know Your Customer) process, enabling customer verification in a matter of minutes, compared to hours or even days in other jurisdictions.

“Using Singpass has allowed us to expedite KYC and enhance the customer onboarding process, making it faster and more seamless,” Lin noted.

Singaporean Traders: The Buy-and-Hold Mentality

Lin described Singaporean crypto traders as generally passive, preferring to buy and hold their assets rather than engage in active trading. This HODL mentality aligns with the overall conservative approach of the market.

“The majority of Singapore’s crypto traders prefer holding onto their assets instead of frequent trading. It’s a unique trait compared to other more active markets,” she said.

Token Vetting by MAS

Another regulatory hurdle for OKX Singapore was the process of getting tokens approved by MAS for trading on its regulated platform. Unlike unregulated exchanges, every token listed must go through a due diligence process, including submitting a legal opinion that the token is not a security.

“Initially, we had 21 tokens listed. As of September 2nd, we’ve expanded that number to over 50, with more tokens under review by MAS,” Lin said. “Once they give the green light, we’ll add more to our platform.”

Binance and OKX: Different Approaches to Licensing

While Binance has faced challenges in gaining a foothold in Singapore due to regulatory restrictions, OKX Singapore has managed to navigate the complex licensing environment. Lin’s background at Grab, Southeast Asia’s leading super-app, has helped her steer OKX Singapore through this process.

“Obtaining the full license from MAS is not meant to be easy, but it’s a testament to our strong regulatory framework and compliance,” Lin concluded.

FAQ