By taking this step, ADDX said investors can jump into “more sophisticated investment opportunities in the private markets, which tend to be more resilient in times of market volatility,” the firm said in a statement.

ADDX said it will instigate “appropriate risk management measures” that allow for the price volatility of crypto assets. For example, ADDX will recognise only cryptocurrencies with a higher market capitalisation and will apply a discount rate when valuing the assets. 

Digital assets such as “stablecoins” have moved dramatically in price, shaking some confidence in the wider space, although the sector is becoming more “mainstream” in attracting large financial institutions such as Morgan Stanley and JP Morgan. 

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 S$300,000 , or their net financial assets exceed S$1 million, or their net personal assets exceed S$2 million.

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

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 per cent for bitcoin or Ether and 10 per cent 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 must provide documents to show that the value of their net personal assets meets the S$2 million threshold after the inclusion of crypto assets with the discount rate applied. 

In late May ADDX raised $58 million in a Pre-Series B funding round. Since the company’s inception in 2017, the latest investment took total funds raised by ADDX to around $120 million.

The financial technology company uses blockchain and smart contract technology to tokenize and fractionalise private market opportunities such as pre-IPO equity, private equity, hedge funds, and bonds. Such technology allows ADDX to cut minimum investment sizes from $1 million to $10,000, widening investor access to assets which were once the preserve of the ultra-wealthy or large organisations. To that extent, ADDX is part of a wider trend of firms using technology to make it easier for investors to enter the space.