On LinkedIn, Zann Kwan’s profile reads “Crypto Queen” — to be more precise, ACCA named her crypto royalty, but, you know, lemonade out of lemons. Today, Kwan playfully revels in this bestowment. Still, it was not a title without its fair share of identity missteps. “At a tech conference back in August 2016 at Singapore Management University, a Caucasian man asked me if I knew where the coffee machine was,” she recounts. “I said I don’t know. But he doubled down and insisted: ‘You should know!'”
“I looked at myself, Zat, at what I was wearing. Yes, I was pregnant, but I was appropriately dressed. Yet, I was still mistaken for a member of the staff.” Muttering quietly under her breath while booking her ride home as if not wanting me to hear, Zann adds: “There’s just not enough women in the digital assets space.”
The 47-year-old managing partner and chief investment officer of Revo Digital Family Office is primed to opine on the digital assets industry within the family offices (FOs) space — gender disparity or otherwise. After all, Kwan was the CEO and co-founder of Bitcoin Exchange, which launched Asia’s first public Bitcoin vending machine in February 2014; a board member of the Association of Crypto-currency Enterprises and Startups, Singapore (ACCESS); and a board member of CFA Society Singapore.
But Kwan’s rise to the top did not start with digital assets — it was real estate.
In 2001, two months after the 9-11 tragedy, Kwan took on a role auditing real estate investments, first with Arthur Andersen New York Office. and later with KPMG. Her last position in New York City was vice president of Acquisitions with The Andalex Group LLC.
When she returned to Singapore in 2010, Kwan worked as vice president at the Government of Singapore Investment Corporation, specialising in real estate and portfolio management. Around this time, Kwan discovered Bitcoin and the fascinating (but incredibly nascent) world of digital assets. She hasn’t looked back since.
Bridging two worlds
Today, as managing partner and chief investment officer of Revo Digital Family Office, Kwan sees her role as a bridge for FOs navigating the space between traditional finance and the emerging digital assets landscape. “Investors often seem polarised — they either fully embrace or completely reject the concept of digital assets,” Kwan explains. “There is a happy medium. You know, Zat, there wouldn’t be such hesitancy if we were discussing conventional assets.”
The problem, she posits, is education, which, in traditional assets, is extensive and well-researched. She hopes this changes soon: “It’s essential to diversify investments, especially into assets that likely move counter to each other. It is prudent for professional investors to consider allocation into digital assets.”
FOs have since caught on. A Goldman Sachs report published this year titled “Eyes on the Horizon: Family Office Investment Insights” found that 32 per cent of the 166 FOs surveyed currently hold investments in digital assets. Still, opinions on digital assets as a viable investment instrument are divided.
The same report found that, while FOs who are already in the digital-asset ecosystem have become more decisive about cryptocurrencies (an increase from 16 per cent in 2021 to 26 per cent today), the proportion that is not invested and not interested in digital assets divestment has risen from 39 per cent to 62 per cent. When asked how many FOs would be interested in the future of digital assets, the study found that the proportion had fallen from 45 per cent to 12 per cent.
This does not faze Kwan one bit. Instead, she sees the current climate of digital assets in FOs as one with room to grow. “One of my missions,” Kwan explains, “is to educate and highlight the potential of blockchain and digital assets, which most Family Offices assume is about digitising traditional asset processes or deploying FinTech solutions aligning with governmental digital initiatives. It is also about spearheading institutional asset and wealth management in digital assets.”
Her rosy outlook for the future of digital assets is best exemplified by Revo’s expansion plans into Korea and Thailand. “More than 12 per cent of the Thai population hold cryptocurrency. The government there also supports this industry — the Thai Securities and Exchange Commission has set regulations for digital asset licences and tokens.” Korea, according to Kwan, is also incredibly invested in digital assets. “Nearly 30 per cent of crypto trading worldwide is powered within the Korean market.”
The KYC tool
In perhaps the biggest twist of fate, the day before my interview with Kwan, the Singapore parliament was laying out details about the latest $2.8 billion money laundering case that may involve some FOs from China. “When that happened, I immediately checked all the family offices and clients’ accounts that Revo Digital Family Office and Raffles Family Office manage. I can tell you now with certainty that none of them were involved in this case,” Kwan shares confidently. “Zero,” she emphasises.
When I asked if money laundering could happen with digital assets, Kwan was unwavering. “It could happen to any asset class. Recently compiled reports from the United Nations, World Economic Forum, and Cryptanalysis have concluded that less than 1 per cent of the annual $3.2 trillion in illegal activity in the global monetary system is due to cryptocurrencies.”
“The Know Your Client (KYC) knife in digital assets is also more sophisticated than the tools available for cash. It is no wonder that most money laundering cases involve cash and bank accounts.” Kwan adds that the nature of crypto assets and the technology behind their traceability means that crypto exchanges can check and ensure the cryptocurrency isn’t stolen before they are accepted. But in the slight chance that the crypto exchange missed something, Kwan reassures me: “Most crypto transactions are traceable. We can always tell the origin if they are transacted on the public chain.”
For assets like paintings and car, Kwan explains that it might be possible to acquire them with illicit funds. It’s much harder to use crypto for these purchases. “The digitisation of the KYC process in the crypto world makes using cryptocurrency in illicit activities challenging. With crypto, there is transparency and immutability. Transactions can be publicly recorded, offering the potential for unparalleled oversight and auditability — there’s power in that.”
“Years ago, it might have been easier to engage in dubious activities, but now, the KYC process is incredibly robust,” Kwan explains. She presents a quasi-money laundering scenario where someone offers her a million dollars in cash to purchase Bitcoin. “It’s possible, yes, but that action would already raise concerns. Why would someone want to handle such a large sum in cash instead of using a bank account, especially when licensed exchanges can directly deposit into bank accounts? That would immediately raise alarms.”
An inevitable embrace
If it’s not already evident, Kwan sees the world of digital assets potentially permeating every aspect of society — charity organisations included. She shares how she’s currently working with the Singapore University of Social Sciences to see how charities can accept donations in cryptocurrency safely and efficiently. The primary challenge, she shares, is the organisation’s existing infrastructure, which is not set up to accept crypto donations.
Accepting cryptocurrency also brings multiple challenges: valuation, management, and alignment with the organisation’s mandate. But Kwan offers that there are too many advantages to accepting crypto donations for charities to ignore. Of note is the low cost associated with such transactions. “Many people overlook the fact that traditional methods, like cash or in-kind donations, have significantly higher associated costs. With crypto, beneficiaries receive a larger portion of the actual donation.”
It’s easy to see how such a move could benefit FOs with a heftier digital assets portfolio, especially with a recent announcement by the Monetary Authority of Singapore, which launched the philanthropy tax incentive scheme (PTIS) for family offices. The scheme allows qualifying donors in Singapore to claim 100 per cent tax deductions for overseas donations made through qualifying local intermediaries.
For Kwan, the main focus shouldn’t be on whether to accept cryptocurrency donations but rather on how to integrate and manage them efficiently. “From what I’ve gathered, there aren’t significant regulatory hurdles; it’s more about ensuring proper governance when handling such donations.”
“It may look difficult and sound scary, but it’s what family offices and wealth managers must embrace.”