Private market exchange ADDX announced that it now recognises cryptocurrency assets for the purposes of onboarding accredited investors to pave the way for more individuals to qualify as one.

They can thereby participate in more sophisticated investment opportunities in the private markets, which tend to be more resilient in times of market volatility.

These include asset classes such as private equity and venture capital funds, hedge funds and pre-IPO companies.

In line with regulations, ADDX said that it will implement appropriate risk management measures that take into account the price volatility of crypto assets.

Under Singapore’s regulatory regime, individuals have to meet any one of three criteria in order to qualify as accredited investors; their income in the past twelve months exceeds SGD 300,000, or their net financial assets exceed SGD 1 million, or their net personal assets exceed SGD 2 million.

While crypto assets are not currently recognised as income or financial assets, they can be recognised under the third category of net personal assets.

As part of its process for verifying accredited investors, ADDX will begin recognising three coins – Bitcoin, Ether and USDC.

The discount rates ADDX will apply when calculating the value of these crypto holdings is 50% for Bitcoin or Ether and 10% for USDC.

These coins and discount rates will be reviewed at regular intervals and may be revised as market conditions change.

To qualify as accredited investors, individuals can provide documents to show that the value of their net personal assets meets the SGD 2 million threshold after the inclusion of crypto assets with the discount rate applied.

ADDX is backed by the Singapore Exchange (SGX) and is regulated by the Monetary Authority of Singapore (MAS) as a digital securities exchange.

Oi-Yee Choo, CEO of ADDX said,

“In line with ADDX’s mission of democratising private market investing, recognising crypto holdings helps us to serve a much wider segment of investors – not just investors with traditional holdings, but those who hold crypto as well.

At a time when the markets are volatile, this move is also designed to enable crypto investors to diversify into the regulated private markets, which tend to be more stable across different phases of market cycles.”