Singapore’s Propine banks $1.2m funding to protect blockchain assets

Photo credit: Marco Verch / Flickr

Propine Capital has raised US$1.17 million in a seed funding round led by Singapore’s Decacorn Capital, which co-invested with SGInnovate, the Singaporean government’s high-tech venture support agency, under the country’s Startup SG Equity initiative.

LuneX – the cryptocurrency-focused arm of Golden Gate Ventures – also joined the round. Other participating investors included Entrepreneur First, MTZ Holdings, Xpanasia, and Chainfund Capital.

Propine acts as a custodian for blockchain-based digital assets. Its offline solution offers protection against hackers and rogue employees by allowing clients to authorize transactions securely from any location.

Blockchain is… unhackable. But the people using it are hackable.

The service is aimed at organizations that increasingly find they have lots of cryptocurrency on their hands – from traditional banks and financial institutions, to asset management firms, exchanges, and family offices. Propine also serves startups that are raising funds through token sales.

It takes a percentage cut of the assets under its management as a custody fee.

Propine co-founder and CEO Tuhina Singh is a computer engineer who has previously worked as a banker for 16 years, trading equity, bonds, currency, and derivatives for the likes of BNP Paribas and others.

Her co-founder Wong Liang Zan serves as CTO, and has spent the past 13 years developing building enterprise software, including for a  startup that listed on the Sydney stock exchange.

Secure by design

Though blockchain exponents tout the technology’s ultra-secure qualities, recent events have shown that decentralized assets still face security threats. In the first half of 2018 alone, over US$1.1 billion of cryptocurrency has been hacked and stolen – a liability that “would cripple any asset manager” and creates a need for specialist custodians, Tuhina told Tech in Asia.

“When I say ‘hacked,’ it is not the blockchain layer that has been hacked – blockchain is indeed secure by design and is unhackable,” she explained. “But the people using it are hackable, and that’s how crypto assets get lost – people are careless or do not possess full knowledge of how to secure their passwords or private keys, they get phished, and then there are always good old social engineering attacks lurking around where there is money to be made.”

There’re over 25 major blockchain protocols and no universal wallet to store them.

There is also a regulatory demand for third-party custodians like Propine, as regulated financial institutions typically aren’t allowed to hold their clients’ assets themselves. The high fragmentation in the blockchain industry is another reason why there’s a role for Propine and similar providers.

“There’re over 25 major blockchain protocols and no universal wallet to store them. This increases the security and operational headaches of managing them,” said Tuhina.