Independent Reserve Co-Founder Sees the Potential of Digital Assets as an Asset Class for Wealth Management Sector

Independent Reserve, the first licensed cryptocurrency exchange for all investors in Singapore, recently appointed Lasanka Perera as Chief Executive Officer for its Singapore entity. Hubbis met with him to learn more about his views on the current digital assets landscape and his vision for Independent Reserve, of which he was co-founder in Australia in 2013 and remains as Group COO. Independent Reserve launched its Asia headquarters in 2019 and obtained a license from Monetary Authority of SIngapore (MAS) in 2021 to provide digital payment token services. Independent Reserve today offers an order book crypto trading platform, a mobile app, as well as an OTC desk and APIs for institutions and professional traders. The crypto exchange supports Singapore, Aussie, Kiwi, and US dollar trading pairs. Despite the current crypto winter, he is confident that institutional and private investors across the globe will continue their journey into the world of digital assets. Stepping into his new role, Perera’s key agenda is building closer relationships with Singapore-based and the broader Asian wealth industry to help them develop their knowledge and instil confidence in investing in digital assets.

Perera opens the discussion by stating that with Independent Reserve being regulated by MAS, investors and traders can be confident of Independent Reserve’s business conduct and operational excellence.

Trusted

“People trust Independent Reserve for our strong risk management , corporate governance and robust security. Our board of directors brings decades of experience in regulation, traditional finance, risk management and IT security,” he says.

Perera offers more insights into the history of the business. “We started the business in Australia in 2013 and expanded to Singapore in 2019. We became the first licensed digital currency exchange out of 170 that applied in Singapore,” he reports. “We were one of the first crypto companies to receive a banking account from DBS, paving the way for other crypto players looking to do business in Singapore.”

Noting that Independent Reserve’s core offering enables institutions and individual investors to buy, sell and hold their assets securely. Protecting customer assets and providing a frictionless customer experience are the key ingredients for Independent Reserve’s success.

Security at the forefront

Perera continues, “We take the security of our client assets very seriously and studiously avoid counterparty risks. We only list the world’s most liquid assets that have gone through a strict due diligence process. We also invest heavily to ensure the security of our platform. Our systems are developed from the ground up with routine audits, security penetration testing, multi-layer encryption and tiered administrator access.”

Frictionless customer experience

Touching on customer experience, Perera highlights the need for top-notch customer service. “We have a strong team of relationship managers, traders and customer service personnel to support our customers at every step. From providing a smooth onboarding process to execution, settlements and reporting. There is always someone for our customers to contact.”

Perera shared that Independent Reserve is bringing more services that had gained traction with the wealth management sector in Australia into Singapore. For example, a fully integrated service where wealth management firms can give their clients digital asset exposure via API and the trading and portfolio data reported back to the end client via read-only APIs.

Perera also adds that the company has recently offered 1:1 backed cold storage insurance, where the customer is the named party underwritten by one of the largest underwriters in the world. “We are looking forward to bringing that to Singapore,” he says. “That will be another significant advance and confidence booster for clients here in Singapore.”

Hedging global bets

Zooming out, Perera also touched on the current digital landscape trends and why the wealth management community should pay attention to this space.

“Bitcoin is a hedge against currency debasement, it is a hedge against sovereign collapse, and it is a hedge against a world where global debt continues to spiral,” he states, with some considerable conviction. “Beyond Bitcoin, the entire crypto industry is building ways to do financial transactions in irreversible, unstoppable, permissionless ways. Ultimately, this is dramatically increasing access to financial services for everyone.”

The crypto winter is not scaring away wealthy APAC investors either, and Asian family offices are seen to be leaning into the sector for the longer term. According to the Hubbis Wealth Management Forum, 86% of respondents expected their clients to invest more in crypto over the next five years, and 33% of clients already have crypto exposure.

And he believes Independent Reserve is the ideal vehicle for investors to explore these digital assets. “We've been doing it for ten years, and we are the largest exchange in Australia. We are looking to bring our experience and reputation for working with the wealth management sector here to Singapore.”

Overcoming the obstacles

However, Perera opines that the lack of understanding of digital assets and their clients’ financial objectives has resulted in the reticence some players in the traditional wealth management industry have over digital assets.

On the former, he shares that Independent Reserve have been working with the Financial Planning Association of Australia to provide approved CPD courses to enable hundreds of wealth managers and financial advisors to learn about crypto. Independent Reserve is looking to bring similar courses to Singapore.

When it comes to meeting their client’s financial objectives, Perera advises wealth managers to delve deeply into their clients’ mindsets around digital assets. Moreover, they should develop a deep understanding of digital asset history and long-term trends.

Stronger calls for regulation

Perera observes that institutions and investors demand stronger regulatory oversight amidst the unfortunate string of crypto companies collapsing last year. Crypto regulations will continue to take centre stage with regulators around the world.

“As institutions and retail customers demand higher and more professional levels of business conduct, this will positively impact businesses and uplift the industry as a whole,” he added.

He explains that regulated players like Independent Reserve must perform to very high standards. “Being regulated, our on-chain and off-chain activities are highly scrutinised,” he reports, “our accounts have been externally audited, and our systems have undergone regular penetration tests.”

“Companies with well-managed operations and strong risk management controls in place, such as safeguarding customer assets from insolvency risks, as well as strong governance, will be ahead of the pack in the current environment,” he added.

Spring beckons after the crypto winter

Perera asserts that, like the traditional banking industry, the cryptocurrency and blockchain industry is going through its rite of passage, with some inroads to make before it reaches the trust levels of banking. The market will eventually converge and consolidate in the longer run, weeding out the bad players. He is confident that Independent Reserve is well-positioned to capitalise on the next bull market.

Perera explains that the mission for the next couple of years is to build a stronger presence in Singapore and develop greater connections with key institutions. He closes the conversation with a word for the wealth management industry. “The private banks, the EAMs, and the family offices are vital to building our proposition and business here,” he states. “We continue to spend a lot of time with them, to learn of their views and needs, to help build their knowledge and confidence, and ultimately to expand activity amongst their end investors. I foresee the industry will prosper when we work closely together.”

Getting Personal

Lasanka Perera moved to Australia with his parents when he was nine. He grew up in the eastern suburbs of Sydney and studied Economics at Sydney University, which he describes as the finest educational institution in Australia.

Before establishing Independent Reserve, Perera worked for major institutions including Société Générale, where he was on the trading desk. Like many others, the French bank made numerous people redundant in the global financial crisis of 2008, including Perera.

“That was not a pleasant time,” he recalls, “but I was far from alone – there were 280 people at the bank in Sydney then, and 260 were out on the street. After that day, I resolved to only work for myself or firms in which I have control and have never looked back.”

Perera and his family moved to Singapore earlier this year to take over the reins of Independent Reserve Singapore.

During his spare time, Perera works out regularly and enjoys various sports. He used to play cricket at a fairly serious level during his youth. Under his father's influence, Perera is also a rugby fan. “I love watching the Wallabies. We have not quite scaled the heights in the recent years, as we did in the 90s and 2000s,” he says. “Maybe Eddie Jones can turn things around. I certainly hope so.” Perera says he hopes to bring the strong sporting culture in the Australian office to Singapore.

Perera is happily married; they have a four-year-old and a six-month-old baby.