Singapore-based currency exchange and payment firm Fincy announced yesterday that it is pulling out of Yatai City, a controversial development project in Shwe Kokko, a city on the border between Myanmar and Thailand. The app has been accused by several local media outlets of preventing “law enforcement from tracking financial transactions in the city”, the firm said in an announcement.
Shwe Kokko New City Project, also known as Yatai City, is a USD 15 billion development project that includes casinos, villas, high-end housing, industrial estate, cargo depots, international airports, as well as a high-tech hub, as reported by Frontier Myanmar. Situated along the Thai border in Kayin state, near the town of Myawaddy, the Yatai City project is backed by Hong Kong-registered company Yatai International and located in an area controlled by a local government-backed militia, the Karen Border Guard Force (BGF).
Singapore-based BCB Blockchain, which provides blockchain and payment solutions to build smart cities and claims to be the “exclusive provider of blockchain infrastructure” for Yatai City, is at the heart of the project. Fincy, backed by GBCI Ventures, the parent company of BCB Blockchain, also claims to be the “exclusive provider of financial infrastructure to Yatai City’s 40,000 residents.”
The Fincy app allows residents to perform transactions, receive salaries, and manage their expenses online, which are currently not registered under Myanmar’s Financial Institutions Law. Douglas Gan, co-founder of Fincy, told The Straits Times that app is used by 90% of merchants in the city.
However, local media have highlighted the illegal online gambling operations in the area, while civil society groups like Karen Peace Support Network worried that the project could turn into “a money laundering hub.” Online casinos are not normally allowed in Myanmar according to the country’s laws.
“With the creation of Fincy, Yatai and BCB managed to assemble all of these resources in a phone app that provided Gan’s ‘full ecology’ for gambling,” alleged Jason Tower, country director of US Congress-funded United States Institute of Peace (USIP) in Myanmar, and Priscilla A. Clapp, senior advisor at USIP in a co-written article published on August 6.
They urged governments who adopt smart city technologies to “take a hard look at the potential for Fincy-type technologies to damage their own financial and banking systems, particularly to the extent that they must operate in international markets, where money laundering is heavily policed.”
In response, Fincy said they have “zero tolerance to illegal activities and unethical practices.”
Vanessa Koh, chief technology officer at BCB Blockchain told Frontier Myanmar that the firm will “actively seek to combat” money laundering.
Launched in the first quarter of 2020, Fincy allows users to exchange currencies and send payments with both fiat and crypto currencies. Besides Myanmar and Singapore, Fincy’s service is available in Cambodia, where it is fully licensed and accepted at more than 700 merchants and used by over 40 companies for payroll, according to the company.
Update: Fincy reached out to KrASIA to clarify that the none of the accusations made by local media and civil society groups have been confirmed. KrASIA has edited the title and the sixth paragraph to reflect this change.