Cryptocurrency has been a hot topic since last year.
Forbes in 2017 wrote that a main reason why crypto had so much hype was because people got curious and fascinated by this new digital currency.
This burgeoning interest then caught the attention of retail and institutional investors with deep pockets.
Now, startups and savvy businesses are raising funds through Initial Coin Offerings (ICO), which Forbes says, creates “new value for the cryptocurrency market”.
Early last year, Singapore hadn’t really caught on the crypto wave yet, so anyone looking to buy their first Bitcoin or Ethereum typically has to use an online wallet and an exchange that’s based overseas.
So when we learned that there’s a crypto exchange in Singapore that lets people buy coins over-the-counter (OTC), we decided to visit their office to find out more.
Shopping Online For Crypto
If I was worried about getting lost looking for a crypto office in an industrial building, it was unnecessary.
As soon as I stepped out of the lift, NuMoney‘s yellow neon sign and bright orange doors greeted me.
I met Lee Wei Ping, who is the Operations Manager at NuMoney, and she settled me into a seat to show me how to buy crypto OTC.
But before we started, I wanted to understand why they introduced an OTC service when buying online is more convenient.
“I think one of the reasons why people buy online is because there are a lot of options out there,” she began.
“With so much information up on the Internet out there, people can easily Google and find out if it’s real, and they can look at all the different price points from any vendors.”
People can trade anytime and anywhere they want to because it’s online, and transactions are quick and quite effortless.
But there is the possibility of getting scammed because for one, the buyer doesn’t know who are they buying from, and because it’s on the Internet, the buyer can’t tell where they’re from, she said.
Another reason that keeps people away is the possibility of having your online crypto wallet hacked into.
That’s because anyone who wants to trade crypto has to have a wallet, which comes with a public key and a private key.
If they lose or reveal their private key, anyone will be able to access their wallet and take all their cryptocurrencies, or lose them forever.
Like this Australian man who, in 2013, reportedly lost his keys after the USB he had stored them in “died” and he lost millions.
Tax And Privacy
Wei Ping explained that because these virtual currencies run on blockchain, a digital ledger that records cryptocurrency transactions chronogically and publicly, anyone with enough skills may be able to access those information illegally.
Most people like that blockchain is decentralised because they want to be in control of their data and be independent of central authorities.
But for people who want to stay anonymous, especially those who are affluent, this reason could be enough to deter them from trading cryptocurrency, Wei Ping told me.
She observed that these people who trade crypto could be “done with investing or (trading) stocks, and they’re looking for new things to invest in”.
“Some people want to enter the crypto market but they are not sure if that’s legal in Singapore, and if they need to pay tax should they earn (profits) from (trading) it,” she continued.
For those who are concerned that their profits will be taxed, they checked with IRAS and MAS via email and found that if it’s for capital gains, then those profits are non-taxable.
Making Crypto More Approachable
Wei Ping explained that before the crypto boom in Singapore, buyers here had to get crypto via a US website, do wire transfers, and go through a bank before getting their coins.
Prices were subjected to foreign exchange rates and the process took two weeks.
So programmers Steven Goh and Bach Le, CEO and CTO of NuMoney respectively, set out to make buying crypto in Singapore easier.
When NuMoney first started, their initial business model was to first find a crypto liquidity provider, get funds via wire transfer, and then resell the cryptocurrencies at a spread.
Some time later, they realised that this model wasn’t sustainable, so that was when they decided to build their own exchange.
They tested their OTC service at the time when crypto was doing “pretty good”, and their crypto-reselling business was slowly picking up.
But it was still tough as they were relying on an overseas provider, spending about $50,000 to $100,000 to get crypto to be resold on their platform.
When their transfers got cut off and banks delayed processing their wire transfers, Steven and Bach suspended the business because there wasn’t enough supply.
They concluded that unless they are their own vendor or liquidity provider, NuMoney cannot survive.
Steven doubled down on building the exchange with Bach as they resumed business – and their efforts paid off, as the NuMoney exchange launched in April this year.
The purpose of their OTC service is to serve people who are not tech-savvy, like the elderly.
As it is so technical, people are afraid of doing it by themselves so they want a professional to guide them, she said.
Subsequently, they’ll encourage their OTC customers to trade online by themselves using their exchange because the spread is 5% when trading via OTC, slightly higher than trading on the NuMoney exchange.
“We’re creating an order book exchange so users can trade amongst themselves. With OTC, they trade with us,” Wei Ping added.
Buying Your First Crypto
“If you’re Singaporean, all you need to do is to come in with your ID, we’ll take a photo of it, and then we’ll register you using our website, for first timers to keep track of their record. And that’s it,” she said.
“For the exchange, it’s similar to all other exchanges. Upload your ID, a proof of address, then take a selfie of you holding up a sign that says ‘NuMoney’ and the present date, then upload it on our platform.”
Customers can use any free online crypto wallet or get a physical crypto wallet from NuMoney or from any other vendors.
If they haven’t set up their wallets yet, the NuMoney staff will set them up for free.
They recommend to get a free online wallet if customers are only trading small amounts, like $200.
If customers are serious traders, they can purchase a Ledger Nano wallet at the NuMoney store for S$250.
Customers can start trading once that is done.
Buying crypto with cash OTC:
- Customer visits NuMoney, carrying $200 worth of cash
- Gives her money to staff who will credit them into her wallet in the NuMoney exchange
- She proceeds to buy about 0.45ETH
To withdraw cash OTC:
- Customer visits NuMoney
- Requests to withdraw money; crypto will be sold and amount credited into wallet
- Leaves with amount of cash from the sale of her crypto
Customers can also choose to do a bank transfer when at their office, if they don’t have cash on hand.
Similarly, when they withdraw, they can request NuMoney to transfer their money through internet banking.
Wei Ping noted that when trading on their exchange, it takes two days for customer’s money to be deposited into the wallet.
Depending on which currency the customer is getting; they can get ETH in 15 to 20 minutes, and XRP (Ripple) and NEO in five to 10 minutes.
As for BTC, it can take up to one hour because it requires two confirmations to process.
Miners tend to not want to spend too much effort doing that because they don’t earn much from the sale if it’s a small purchase, Wei Ping explained.
Become A Coin Master
When I asked about the people who come to NuMoney, Wei Ping said customers range from “aunties and uncles”, to polytechnic and university students who are studying business and then got into crypto.
The oldest customer they’ve served was a lady in her mid-70s.
“She came for our seminar and arrived in a scooter bike and parked it outside our office then came in to listen to our seminar,” Wei Ping recalled, “I think she heard about our seminar from her friend.”
Perhaps one advantage NuMoney has over foreign exchanges is that they are based here, so they are able to better provide customer support for Singapore customers.
The team also set up a NuMoney group on Telegram where customers can ask them questions and others can participate in the conversation too.
Since launching in November 2017, more than S$10 million have been traded on their platform, and their team has now grown to slightly over 20 members, according to Steven.
NuMoney launched their own token, NuMoney coin (NMX), and is currently on public sale and you can participate in it via the NuMoney exchange.
At one point during our conversation, I was curious about their trade mining feature, and Wei Ping roped in Ted, their software engineer, to explain to me in detail what it’s about.
Knowing that NuMoney is also present in Malaysia and Indonesia was assuring, because I can trust that they are serious about their business.
I left their office feeling more confident about buying cryptocurrency on my own and excited to tell a friend about NuMoney.
This article was written in collaboration with NuMoney.
Featured Image Credit: Victoria Sek, Vulcan Post