Nomura-backed Komainu buys Singaporean custodian Propine to branch into Asia

Komainu, a crypto custody provider backed by Nomura Group, has completed its first acquisition by purchasing rival Singaporean custodian Propine Holdings.

Japanese Nomura-backed crypto custodian Komainu’s Propine acquisition is still awaiting approval from the Monetary Authority of Singapore, according to an Oct. 22 Bloomberg report.

Propine Holdings has been operating as a digital asset custodian in Singapore since 2018. In November 2019, Propine was granted a conditional license from the Monetary Authority of Singapore after co-creating the MAS’ FinTech Regulatory Sandbox.

Komainu Co-Chief Executive Paul Frost-Smith said in an interview with Bloomberg that Komainu’s acquisition of Propine will likely be the first of several acquisitions to come. However, he refused to reveal the exact amount Komainu paid to acquire Propine.

Frost-Smith added that he hopes to close the financing round for Komainu within the next few weeks.

The acquisition of Propine is the first step towards Komainu’s expansion into other parts of the Asia region, Frost-Smith said. He describes it as “definitely a key factor in building the business” as the acquisition of Propine will provide Komainu with a Capital Markets Services license from Singapore.

Additionally, Frost-Smith stated that Komainu will also apply for a Major Payment Institution license in Singapore, allowing the custody provider to operate in Singapore. He sees Singapore as an integral part of Komainu’s future business endeavors, given the growing demand for advisory services from private banks in Singapore. The same can be said for collateral management services for hedge funds and other asset managers.

Komainu plans to expand its business to Singapore, Hong Kong and other economies that regulate digital assets. However, Frost-Smith added that Japan will remain the main focus of Komainu operations as it is Nomura’s main market.

Komainu marked Nomura’s first foray into the crypto space in 2020, when it offered Bitcoin (BTC) and crypto custody services for institutional investors. Initially, Komainu offered Bitcoin, Ethereum (ETH) and other cryptocurrencies with significant market capitalization.