Singapore’s Fincy Pulls Out of Controversial Chinese-Backed Gambling Hub in Myanmar
By Nan Lwin 8 October 2020
YANGON—Singapore-based financial services firm Fincy has announced it will withdraw from a controversial development project run by shady Chinese investors accused of involvement in illegal cryptocurrency and online casino operations near the Thai border in Myanmar’s Karen State.
On Wednesday, Fincy said in a statement that it is pulling out of the Yatai New City project in Shwe Kokko Village, Myawaddy Township, following a series of media reports alleging that its services were being used to prevent law enforcement from tracking financial transactions in the city.
“Fincy refutes all claims of nefarious dealings and holds zero tolerance [for] illegal activities and unethical practices,” the statement reads.
Moreover, the company took down all references to Yatai New City from Google Play Store, including a notice that had advertised Fincy as “the exclusive provider of financial services in Yatai city.”
Fincy did not respond to a request for comment by The Irrawaddy on Thursday.
Known locally as “China Town”, the planned US$15-billion (19.35-trillion-kyat) new city project is a collaboration between the Karen State Border Guard Force—a Myanmar military-backed armed group led by Colonel Chit Thu formerly known as the Democratic Karen Buddhist Army (DKBA)—and a Hong Kong-registered company, Yatai International Holding Group (IHG). The development involves luxury housing, condominiums, hotels, shopping centers, golf courses, casinos, gambling and entertainment, tourism, culture and agriculture.
A promotional video by IHG touts the project as the “only area in Shwekoko that is authorized to operate casinos,” and casinos are the zone’s primary source of revenue, according to its business plan. It claims the project is a part of China’s ambitious Belt and Road Initiative (BRI), and that the goal of the project is to make a significant contribution to the huge infrastructure scheme.
However, the Yatai project is currently the subject of an investigation by the Myanmar government after drawing criticism from locals concerned about its scale and lack of transparency, as well as the social impacts of gambling and a growing influx of Chinese migrants. In addition, suspicions have been aroused that transnational gambling networks are operating in the city, and using it as a money-laundering hub.
Within the city, many transactions are conducted through Fincy, which allows users to exchange currencies and make payments. Launched in 2019, it also offers multi-currency accounts and instant transfers.
In August, it added cryptocurrency services, allowing users to send a variety of cryptocurrencies including Bitcoin from their existing crypto wallets to their Fincy wallet. This means the crypto can be sent to other users from Fincy wallets, traded on an exchange, converted to fiat currency, or spent at participating merchants. Myanmar has no specific mechanism or legal framework for regulating cryptocurrencies and has warned against investing in such currencies.
In August, the Chinese Embassy in Myanmar said the new city project is not a part of the BRI and supported the Myanmar government’s move to investigate the project in accordance with the country’s laws and regulations.
However, following the embassy’s announcement, IHG released a statement providing an update on the status of the project, claiming that while it is not sanctioned by the Chinese government, it is still “in service of” the BRI. It also claimed the company was not involved in gambling or related industries, despite the fact that its main investors are accused of engaging in illegal casino activities in Cambodia and the Philippines.
Moreover, it insisted the company “has determined” to give the casino sector a try after the Myanmar government recently completed the process of legalizing foreign investment in the gambling industry. In the statement, the company also unveiled a plan to construct a twin city in Mae Sot, across the border in Thailand.
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