6 Cryptocurrency Startups In S’pore That Are No Longer Around
Singapore is proud to be the center of cryptocurrency in Southeast Asia and the surrounding region, with blockchain ranked among the top three industry trends in the country as of 2020 and new cryptocurrency startups. implemented in recent years.
The Monetary Authority of Singapore (MAS) has taken a pro-blockchain stance with favorable tax treatments and public funding for blockchain development. He also considers blockchain technology “fundamental” to Singapore’s economic development.
Singapore has also joined the ranks of a handful of countries to create a cryptocurrency and blockchain industry association, dedicated to helping small and medium-sized cryptocurrency and blockchain businesses.
This makes it relatively easy for locals and foreigners to set up a cryptocurrency business in Singapore, which is why cryptocurrency and blockchain companies are mushrooming here.
However, many startups seem to just follow trends and burn investor money instead of showing real results and usefulness. Worse yet, some of them actually turn out to be pumping or dump or Ponzi schemes that cheat users’ money.
Here is a look at six cryptocurrency startups that have launched in recent years in Singapore, but are no longer operational.
1. Torque exchange systems
Incorporated in 2019 in the British Virgin Islands as an online cryptocurrency trading platform by Singaporean Bernard Ong, Torque appeared to be a multi-level marketing (MLM) investment platform, in which the new investors must invest their money and recruit new ones. investors to register with Torque.
Members are then paid by a downstream investment sponsorship commission through a one-tier compensation structure.
A tiered marketing or pyramid scheme will usually require participants to pay an upfront fee. In return, participants are promised financial rewards for each additional participant recruited, hence the pyramid structure.
As more salespeople are recruited, participants hope to recoup their upfront costs and make sizable profits. However, these pyramid schemes will eventually collapse when they run out of new hires, resulting in the loss of all upfront fees for those bottom-of-the-pyramid salespeople.
Earlier in February, Bernard announced the collapse of the company and the suspension of all business activities.
The company blamed a dishonest employee who allegedly engaged in unauthorized leverage on the platform and suffered losses, draining members’ investment accounts.
A police report has since been filed against the employee, who is believed to be responsible for the losses. However, the employee is said to be based outside Singapore and could not be contacted.
Bernard had also asked courts in the British Virgin Islands to liquidate the company, which was granted in mid-March of this year.
As of April 2021, up to 115 police reports had been filed against Torque Trading Systems by defrauded investors. It has also been reported that many Singaporeans lost their savings and investments of up to S $ 1million due to the Torque debacle.
Founded in 2015 during a hackathon in Singapore, TenX was a platform that connected user assets stored on the blockchain with ‘real’ payment platforms through an all-in-one crypto platform based on the blockchain.
Users can take advantage of the TenX app to store different types of blockchain assets in one place, and use its physical debit card to pay with crypto at retailers around the world.
In 2017, the company raised an Initial Coin Offering (ICO) of US $ 80 million (S $ 107 million) and positioned itself as one of Singapore’s most powerful crypto players.
However, in January of last year, TenX announced its decision to discontinue services and shut down indefinitely.
New registrations were disabled and members had to withdraw all of their funds from the TenX wallet. Meanwhile, its website said they were migrating to a new project called Mimo.
One of the main reasons for their downfall was the insolvency of wireline cards in Europe and Singapore. Wirecard – the parent company that powers TenX crypto debit cards – filed for insolvency in June 2020 after facing allegations of embezzlement of more than $ 2.1 billion of its funds.
Reddit sources and an interview with displaced co-founder Dr Julian Hosp suggest lack of innovation, product and user base growth, and management scandal as other contributing adverse factors to his final demise.
3. PAL network
PAL Network (PAL) was a Singapore-based two-tier protocol for financial assets that aimed to improve access to insurance protection.
Founded by CEO Val Ji-hsuan Yap in 2016, PAL was a mobile app that allowed users to track all of their insurance policies on one platform. He used artificial intelligence (AI) and smart contract technology to digitize and store policies more securely and transparently.
The company had also formed partnerships with several large insurers such as AIG, Aviva, AXA, Etiqa and NTUC Income.
In an average article which was released in October 2020, the PAL network team released a statement on concluding their blockchain journey.
The post stated that they would cease operations, remove PAL tokens from all exchanges, and burn any remaining PAL tokens by October 30, 2020. Additionally, they would donate their remaining capital to World Vision.
According to the post, the reason for the closure was because they lacked funds to continue operations and development.
Their funding depletion was attributed to the erosion of the market value of ETH, which was the main digital asset contribution received by PAL Network for their sale of PAL tokens. Within two months of the token sale being completed, ETH began a downward spiral during the 2018 crypto crash.
This erosion in the value of ETH resulted in the loss of almost 60% of its funding by PAL Network of the sale of PAL tokens, which significantly shortened the development and operations of PAL Network by more than half – two years, against five years.
The company also mentioned that due to the Covid-19 pandemic, interest from insurance partners has declined significantly. They had also failed to mass-market their insurance product offerings.
Founded in 2012, CoinPip was a Singapore-based international money transfer start-up that aimed to disrupt the money transfer industry by enabling B2B customers to make payments and transfers abroad with Bitcoin to facilitate transactions. backend transactions.
The team had secured investments and advisers from DBS Bank, PayPal, Visa, among others.
As of February 11, 2020, CoinPip has suspended all operations “until further notice” to focus on reviewing licensing requirements under Singapore’s Payment Services Act. The MAS had updated its regulatory framework for crypto-related activities, including digital payments.
CoinPip and other crypto companies in Singapore had to register first, then apply for a license, as well as disclose the identity of their traders and report suspicious activity.
FYB-SG was a Singapore cryptocurrency trading exchange that had been operating since 2014. It was owned by Dealworks Pte Ltd, which was registered as a stored value depository facility and did not require MAS approval.
The company had all the functionality of a trading platform and allowed ordering, cancellation and viewing of orders, price information, transaction history and order book. It also had a mobile app for Android and iOS devices.
The company ceased operations in 2019 due to the closure of its bank account.
Apparently, banking relationship issues are a common reason many cryptocurrency companies shut down. However, most of the time, the banks involved do not offer any reason for closing corporate bank accounts.
Launched in 2017, NuMoney was a business that allowed customers to buy and sell Bitcoin and other cryptocurrencies over the counter (OTC).
They have helped unsuspecting Singaporeans physically buy crypto at their counters. Users are expected to register with their ID and perform cryptocurrency transactions on site with the assistance of NuMoney staff.
In addition to their OTC services, the company had their own online trading exchange platform.
As of 2019, NuMoney was no longer operational due to the closure of their bank accounts – OCBC, Maybank and DBS.
Apparently, they received too much money from their customers, on average four-figure sums. (source of hyperlink) Although NuMoney had the proper documents and invoices to back up these transactions, the banks reported NuMoney and closed their accounts.
In a blog post, founder Steven Goh expressed his disappointment with Singapore’s banking system and unfair practices that limit the growth of fintech players.
Easy to start, hard to survive
It can be relatively easy to start a cryptocurrency business in Singapore, but the road to profitability and adoption is much longer and harder than average startups in other industries.
Additionally, blockchain and cryptocurrency technology is relatively new and complex, resulting in a limited programming ecosystem to develop products, not to mention the difficulties in finding use cases and adapting to the market. product market. The volatility of the value of cyptocurrency poses many other problems for crypto companies as well.
The pushback from the traditional banking sector and MAS could also cripple the operations of these new businesses, as the legal framework governing the space has not been properly defined and could change at any time.
The long-term potential of a successful cryptocurrency business is limitless, but just like the value of cryptocurrency, one can expect roller coaster fluctuations along the way.
Therefore, it is no understatement to say that starting a cryptocurrency business is not for the faint hearted.
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