Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
INTERVIEW Sygnum points to banks’ role in evolving digital asset landscape
Gerald Goh, co-founder and Asia-Pacific CEO of Sygnum / Courtesy of Sygnum
By Lee Yeon-woo
Banks move past 'will crypto stay' to 'how to build it,' says company's APAC CEO
HONG KONG — There was a time when people relied heavily on cryptocurrency exchanges to handle nearly all their crypto activities. The industry was new, and few platforms — especially in traditional finance — offered similar services. Many questioned why banks were needed at all, when dealing directly with exchanges was often cheaper and less cumbersome.
But the collapse of FTX in 2022 changed that perception, said Gerald Goh, co-founder and Asia-Pacific CEO of Sygnum, the world’s first regulated digital asset bank.
“FTX made it very clear to everyone that there are significant counterparty risks when you deal with unregulated service providers,” Goh told The Korea Times in a recent interview.
“Right now, you don’t hear anyone advertising that they are unregulated. Everyone is saying they have a license somewhere. That’s a big change,” he added.
Founded in 2017 with dual headquarters in Switzerland and Singapore, Sygnum provides crypto services including trading, custody, lending, tokenization and asset management. The company serves more than 2,200 clients, primarily traditional financial institutions and high-net-worth individuals, but not retail investors.
Goh said he and his three co-founders expected the industry would eventually “cross the chasm” and become a mainstream asset class, but believed adoption would require institutional participation.
One of the first problems they aimed to solve was the difficulty of converting fiat currencies such as the U.S. dollar into digital assets. Traditional banks could monitor fiat flows but had little visibility into on-chain transactions, often responding to perceived money-laundering risks by blocking transfers or closing customer accounts.
Goh said a digital asset bank that can process fiat transfers while managing wallets and verifying on-chain activity would be better positioned to assess the legitimacy of customer behavior and help grow the industry.
Today, as more regulated institutions enter the sector, transfers between banks and crypto exchanges have become smoother. But the dynamics change as transactions grow larger, according to Goh. Sygnum recently supported a $1 billion transaction for a crypto foundation, moving funds from stablecoins into money-market funds and U.S. treasuries.
Goh said Sygnum operates under the same Basel III capital requirements as traditional banks and holds the same banking license as UBS in Switzerland. That means the bank must set aside more of its own capital for activities involving market risk.
“When you’re trying to move that kind of money, if you don’t have a bank involved, it’s very likely the transaction will get blocked somewhere, and that can be a very unpleasant experience,” he said. “Institutional clients are much more sensitive to those risks.”
Sygnum is also in discussions with several financial institutions in Korea, aiming to help accelerate their entry into the digital asset market once regulations allow banks to offer such services.
“Globally, banks — especially in jurisdictions preparing to introduce crypto regulation — are being forced to decide whether to buy or build,” he said. “Both approaches can make sense. It depends on the scale and ambition of the bank.”
“Two years ago, most of the conversations we were having with banks were about whether crypto was here to stay,” Goh added. “That question has largely been answered. Now people are figuring out what to do about it. It's progress.”