Nomura-backed Komainu Acquires Propine to Step into Asia

October 23, 2024

Komainu acquires Propine Holdings to expand its Asian operations.
The deal allows Komainu to get significant regulatory licenses in Singapore.

Komainu, a cryptocurrency custodian backed by Nomura Group, has made its first acquisition, purchasing Singaporean rival Propine Holdings. This significant move, first reported by Bloomberg on October 22, is still awaiting approval from the Monetary Authority of Singapore.

Propine Holdings, founded in 2018, has established itself as a digital asset custodian in Singapore, obtaining a conditional license from MAS in November 2019 after co-developing the FinTech Regulatory Sandbox. This acquisition marks a significant turning point for Komainu as it seeks to enhance its presence in the Asian market. With this strategic move, the company is poised for growth and increased influence in the region.

Komainu’s expansion initiatives are being driven by rising demand from institutional clients, such as private banks, hedge funds, and asset managers. CEO Paul Frost-Smith highlighted the growing demand for Komainu’s advice and collateral management services, especially in Singapore and Hong Kong. He also highlighted that investors in Australia, Thailand, and Malaysia have successfully implemented Komainu Connect, the company’s collateral management instrument.

Komainu’s Strategic Expansion in Asia

Frost-Smith emphasized that acquiring Propine is essential for Komainu’s growth trajectory, as it enables the company to secure a Capital Market Services license in Singapore. This license will facilitate Komainu’s expansion in the region, aligning with the increasing demand for crypto custody and advisory services from private banks. Ultimately, this strategic move positions Komainu to better serve its clients in a rapidly evolving market.

Additionally, Komainu intends to apply for a Major Payment Institution license in Singapore, expanding its operational presence. Frost-Smith emphasized Singapore’s critical role in Komainu’s future strategies. He noted that the city-state is becoming increasingly important as hedge funds and asset managers seek robust collateral management services. This growing demand positions Komainu to enhance its offerings and capitalize on emerging opportunities in the region..

The company also intends to expand its services to other regulated markets, such as Hong Kong and others with established digital asset rules. However, Japan will remain Komainu’s primary focus because it is Nomura’s home market.

In addition to these developments, Frost-Smith announced that Komainu expects to close a funding round in the coming weeks, although he did not specify the amount to be raised. This acquisition is set to drive future growth and innovation in the digital asset industry.

Komainu launched Nomura’s first cryptocurrency attempt in 2020, originally providing custody services for Bitcoin, Ethereum, and other major cryptocurrencies. Komainu strategically acquires Propine to strengthen its position in the competitive cryptocurrency custodian scene.

As Komainu expands, Japan’s creating a regulatory environment may strengthen the company’s position in the region’s booming cryptocurrency sector.