Cryptocurrency reshapes finance with decentralised transactions and visions of a global economy. However, converting digital assets like Bitcoin or Ethereum into fiat currency poses a significant hurdle for Web3 investors. This process, known as cashing out, introduces complexities that test even seasoned participants. Security threats, regulatory oversight, and tax requirements transform a straightforward transaction into a demanding task.

I read Anndy Lian’s article about KYC last week, and I agree with him on the importance of KYC from the platform and regulator’s view, but what about the users’ point of view? How do they cash out? I offer this expert guide. It equips investors with practical steps to navigate withdrawals safely and legally, emphasising compliant platforms, KYC processes, and tax compliance.

The cash-out challenge and its importance

Cryptocurrency holds theoretical value until converted to fiat. Investors, whether managing Bitcoin or obscure altcoins, rely on this conversion to unlock tangible utility. The process links blockchain technology with traditional banking, exposing vulnerabilities.

Scammers exploit this transition, targeting investors moving substantial sums. Selecting an unreliable platform risks fraud or regulatory intervention, potentially wiping out a portfolio. Compliant platforms provide a secure bridge to fiat, making mastery of their use a critical skill for Web3 investors.

Advantages of compliant platforms

Hundreds of crypto services compete for attention, from Telegram traders to X promoters offering fast cash-outs. Yet, compliant platforms like Coinbase, Gemini, and Kraken distinguish themselves through regulation and reliability.

Authorities such as the US Treasury’s FinCEN or Europe’s ESMA license these platforms, enforcing accountability via regular audits. The SEC imposed billion fine on an exchange for breaching anti-money laundering rules in 2023/24, underscoring the stakes of non-compliance. This oversight shields investors from frozen funds or asset seizures.

Transparency further sets these platforms apart. They disclose banking partners and custody details, clarifying where funds reside. Coinbase, for instance, collaborates with JPMorgan Chase, a pillar of financial stability, offering assurance unregulated options lack.

Also Read: How AI and Web3 are rewiring music’s infrastructure for a new creative economy

The 2022 FTX collapse, which devastated investors, reinforces this point. Compliant platforms also endure rigorous scrutiny, minimising risky behaviour. Though they demand KYC documentation, this trade-off ensures safety. Data and industry trends affirm these regulated entities as the most dependable choice for withdrawals.

Identifying compliant platforms

Distinguishing legitimate platforms from the crowd requires diligence. Investors can follow a structured approach to evaluate options effectively.

• Licensing: Seek platforms holding recognised credentials, such as a Money Services Business or Virtual Asset Service Provider designation. Confirm these on regulatory sites like Canada’s FINTRAC or the UK’s FCA.
• KYC standards: Reputable platforms mandate identity verification, requiring documents like passports and address proof. Absence of this step signals potential fraud.
• Transparency: Verify that platforms list banking partners or custodians. Coinbase’s partnership with JPMorgan Chase exemplifies this clarity, while vague details raise concerns.
• Reputation: Consult user feedback on sites like Trustpilot or CryptoCompare. Investigate histories of breaches or regulatory disputes.
• Support and compliance: Confirm the presence of dispute resolution mechanisms and adherence to data protection laws like GDPR.

Applying these criteria reduces exposure to fraudulent services, securing the withdrawal process.

Risks of unregulated channels

Unregulated methods, such as peer-to-peer trades on LocalBitcoins or deals via Telegram and X, tempt investors with convenience. However, they frequently lead to losses. Interviews with affected investors reveal stark examples. One individual lost US$60,000 in USDT to a Telegram contact who vanished after the transfer, leaving no recourse. These schemes often involve counterfeit buyers or sellers who exploit the lack of oversight.

Legal risks compound the danger. Transactions tied to illicit activities, even unintentionally, can trigger penalties. Compliant platforms deploy systems to flag and halt such risks, offering a stark contrast. The evidence highlights unregulated channels as a perilous choice for cashing out.

KYC: Security meets privacy

KYC processes spark debate for their intrusiveness, yet they serve a vital purpose. By confirming user identities, platforms block criminals from exploiting their systems, protecting both operations and clients. Regulators underscore this necessity.

Privacy worries persist, especially amid data breaches. Still, leading platforms counter these risks with robust safeguards. Encryption, secure storage, and third-party audits align with standards like GDPR. OSL Pay, for instance, employs end-to-end encryption, thwarting unauthorised access. KYC strikes a balance between security and privacy, proving indispensable for safe withdrawals.

Also Read: How Web3’s open-source technology will create a more equitable world

Taxation: A universal obligation

Some investors assume crypto transactions evade taxes, a costly error. Converting crypto to fiat typically incurs tax liability, with non-compliance carrying harsh penalties. In the US, the IRS classifies cryptocurrency as a capital asset, subjecting gains to capital gains tax. The EU follows suit, and the OECD’s 2022 Common Reporting Standard update ensures banks report large transactions, closing loopholes.

Investors must maintain meticulous records, tracking dates, amounts, and fiat values for each transaction. Platforms like Coinbase provide tax reporting tools, easing the burden. Engaging a crypto-savvy tax professional offers additional clarity. Non-compliance invites fines or legal action, and ignorance provides no shield. Tax diligence is non-negotiable for lawful cash-outs.

Practical steps for secure withdrawals

Cashing out demands a methodical approach. Below, a streamlined process ensures safety and compliance.

• Select a platform: Choose a regulated entity like Coinbase or Kraken, verifying its licensing and transparency.
• Complete KYC: Submit required identity and address documents promptly to activate withdrawal capabilities.
• Plan the transaction: Assess fees, exchange rates, and timing to optimise the cash-out.
• Record details: Log all transaction data for tax reporting, using platform tools where available.
• Monitor funds: Track the transfer to your bank account, confirming receipt within expected timelines.

This framework minimises risks and aligns with legal standards, safeguarding your assets.

The future of crypto withdrawals

The crypto landscape evolves rapidly, with regulations tightening globally. Compliant platforms will gain prominence as governments intensify oversight. Investors must adapt, prioritising safety over shortcuts. Unregulated channels, once viable, grow riskier as scrutiny mounts. Staying informed positions investors to thrive amid these changes.

Regulated options like Coinbase and Gemini offer stability that unregulated alternatives cannot replicate. As the market matures, compliance becomes not just a safeguard but a competitive edge. Investors who master these principles today secure their financial future in the digital era.

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You’ve polished your pitch deck, defined your total addressable market, and rehearsed your investor intro until it feels second nature. Still, there’s one key piece many founders miss – your actual narrative to the public.

With funding tighter and competition fiercer, public relations is no longer a “nice to have”. It acts as a powerful driver of your valuation, reputation, and ability to grab the attention of investors.

Here’s how to use PR to grow your fundraising efforts and avoid mistakes that trap many promising startups in the shadows.

PR has a bigger impact on valuation than you realise

People often assume that “the numbers tell the whole story.” But in early-stage investment how others see you come before actual results.

Studies on reputation show that reputation itself makes up to 35 per cent of a company’s market value. Startups with steady positive media coverage often gain valuation increases as high as 22 per cent even before achieving big revenue goals.

Here’s the deal: investors will look you up online. About 90 per cent of them decide based on what they discover. A solid presence in tech focused press outlets, newsletters aimed at investors, or sites like LinkedIn and Substack makes your company seem like a reliable choice.

Founders who share their perspectives , have a history of leadership in ideas, and maintain a strong personal or company brand are seen as less risky. That advantage counts every bit when going up against others during competitive funding rounds.

Also Read: From fear to freedom: Designing fintech products for the financially anxious customer

Align your PR strategy with your growth

Now here’s a common misconception. PR doesn’t refer to press releases and goes beyond sending out press releases. It’s a flexible and active story telling process that must grow alongside your business:

Seed stage: Begin small and be deliberate

• Explain the reasons behind your “why now” story.
• Take the lead as a founder by sharing insights through LinkedIn posts or guest appearances on podcasts.
• Focus on securing coverage in niche outlets. Early features in focused trade publications or ecosystem blogs work wonders for SEO and add trustworthiness.

Series A: Build trust in your industry

• Share your funding story with a clear purpose.
• Keep updating people about key product milestones and customer successes.
• Form real connections with journalists. Skip the spray and pray method.

Growth stage: Strengthen your reputation

• Bring on board a professional PR agency or hire someone to manage communications in-house.
• Put more effort into creating content like data-driven insights or unique industry reports.
• Attend conferences, panels, and policy talks. You’re doing more than promoting solution, you’re starting a real conversation.

Get the funding announcement right, or stay invisible

When you share your funding news, it should build trust with investors, potential partners and future hires.

Here’s how to do it well:

Share details with the media under embargo about one to two weeks before the official launch. Work with PR teams from your backers to ensure alignment.

Start by saying who you are how much funding you secured, who invested, and why it’s important. Avoid jargon. Share what’s coming next.

Add real, thought-provoking quotes from founders and investors. Make them stick in people’s minds rather than act as fluff.

A clean media kit with founder portraits, team snapshots, product images, and branded logos can be the difference between getting noticed and being ignored.

Publish your release on your site, share behind-the-scenes tidbits on LinkedIn, and provide exclusives to newsletters in your network. Fundraising is not a one-day event — it’s about sharing an ongoing story.

Also Read: Creating a safe digital world: Protecting kids from cyber crimes and preventing cyberbullying

Steer clear of common PR and funding mistakes

Many startups see PR as just another task to check off or as a last-ditch effort. Here’s what to watch out for.

Publishing one funding announcement won’t establish your brand. Maintaining a steady planned presence matters even when things are slow.

Founders often overlook the part that investors examine you through your online presence. Bad press inactive social media, or bland messaging can hurt your progress.

Amazing technology doesn’t stand out without a story. Don’t just explain your offering, show where you fit in and why you’ll dominate.

What do you do when things go south? A founder’s skill in handling crises and has an impact on cutting damage to reputation. Create a plan now. It’s not about if it will happen, but when it will.

Investors don’t just fund ideas, they trust people. Make sure your online accounts are consistent in messaging, updated, and purposeful. You are your startup’s strongest PR tool.

Founders, you are the message

Public relations is not tricks or illusions. It relies on being clear staying consistent, and having the guts to stand out. It is the way you grab people’s attention, gain their trust, and prove to the world and potential investors that you are creating more than just a product. You are creating something bigger.

Ask yourself a few things before sending off a pitch deck or announcing your next round of fundraising:

• Can someone new figure out what we do in half a minute?
• Does our story come across as bold, urgent, and believable?
• Are we being seen in the right spaces enough to make an impact?

The startups securing funding aren’t always the most attention-grabbing. They are the ones that communicate not the most but clearly . PR helps you gain that clarity and gives you a microphone to amplify it.

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Indonesia is strategically steering its digital economy transformation towards the ambitious “Digital Indonesia Vision 2045,” a comprehensive blueprint designed to build a more inclusive and sustainable digital economy.

The government’s multi-pronged approach focuses on optimising national priority programmes with technology, strengthening the digital ecosystem through robust regulation, infrastructure, and talent development, and ensuring equitable access to digital opportunities across all regions.

Strategic pillars of digital transformation

The national digital economy transformation strategy is anchored on three main pillars:

Optimising national priority programmes with the latest technology: Digital technology is seen as key to accelerating the delivery and broadening the reach of four critical national priority programmes: Free Nutritious Meals, Free Health Checks, Cash Social Assistance, and Education Transformation. This involves leveraging strong digital infrastructure and advanced tech adoption, such as the SATUSEHAT Mobile digital platform for health check-ups and integrated digital services for education.

Strengthening the digital ecosystem through regulation, infrastructure, and talent: Digital transformation fundamentally requires a supportive environment comprising strong regulation, equitable access, and a skilled workforce. Initiatives like the Digital Talent Scholarship (DTS), which trained over 400,000 individuals in areas like big data, cloud computing, AI, and cybersecurity by 2024, directly address the talent gap. Infrastructure development includes expanding 5G networks, establishing national data centres, and optimising existing backbone networks like the Palapa Ring Undersea Cable Communication System.

Also Read: Indonesia leads in workforce AI adoption, surpassing global averages

Ensuring equity in the digital economy: Future priorities for a balanced digital economy include strengthening AI governance, expanding infrastructure, investing in digital talent, and improving micro, small, and medium enterprises’ (MSMEs) access to financing. This crucial pillar underscores the government’s commitment to ensuring that the benefits of digitalisation reach all Indonesians, requiring synergistic collaboration among the government, private sector, communities, and society at large.

Key regulatory frameworks: PDP law and beyond

Law No. 27 of 2022 on Personal Data Protection (PDP Law) is a cornerstone of Indonesia’s digital governance. This strategic legislation aims to foster a transparent and secure data governance framework, which is crucial for building public trust and enabling responsible AI development.

However, the report acknowledges challenges in its implementation, with Indonesia ranking eighth globally for data leaks between 2020 and 2024. Incidents such as the mid-2024 ransomware attack on the National Data Center (PDN), affecting 210 government agencies, highlight the urgent need for more effective enforcement.

Beyond data protection, the government is actively developing new regulations. A Cyber Security and Resilience Bill is under review to strengthen cyberspace protection.

Additionally, a draft AI regulation is targeted for publication in the third quarter of 2025, aimed at providing ethical guidelines, transparency, and accountability for AI usage. Regulations like Presidential Regulation No. 132 of 2022 on Electronic-Based Government System (SPBE) are in place to support data and system integration, although challenges remain, such as 40 per cent of State Civil Apparatus (ASN) not being technically ready to operate the system.

Investing in infrastructure and talent

Recognising unequal distribution of digital infrastructure as a significant challenge, the government is accelerating the development of essential infrastructure in remote areas, including power grids and logistics. Efforts include establishing Digital Broadcasting System (DBS) infrastructure in six locations and providing internet access at over 36,830 public service sites. The aim is to continue 5G network implementation, prioritising underdeveloped regions, and to foster investment in data centres and cloud computing capabilities.

Also Read: Input, Output, Support: The framework driving Indonesia’s digital competitiveness

On the talent front, despite efforts like DTS, Indonesia faces a digital talent deficit, needing nine million digital talents by 2030, but projecting fewer than seven million can be developed within that period. Indonesia also ranks 53rd out of 67 countries in digital capability according to the IMD World Digital Competitiveness Ranking 2024, lagging behind regional peers like Singapore (2nd), Malaysia (34th), and Thailand (40th). To address this, recommendations include aligning education curricula with industry needs, improving access to quality digital training in underserved areas, expanding access to digital professional networks, and simplifying administrative processes for digital workers.

Challenges in implementation

While the policy framework is robust, the report underscores several persistent challenges: the pace of innovation often outstrips legal certainty and implementation effectiveness; infrastructure gaps persist in remote and rural areas, hindering technology adoption; digital literacy remains low for micro businesses and the general public, limiting service utilisation; and collaboration between startups and local governments is uneven, leading to sub-optimal alignment of digitisation agendas. Addressing these requires a more integrated strategy, involving incentive schemes, contextual digital literacy programmes, and phased testing of technologies like AI for MSMEs.

Also Read: Java leads, frontiers rise: A provincial breakdown of Indonesia’s digital competitiveness

Ultimately, the successful realisation of Digital Indonesia Vision 2045 hinges on synergistic collaboration between all stakeholders, ensuring that digital transformation creates lasting value and social justice for all Indonesians.

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The image was generated using ChatGPT.

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Markets reacted with caution yesterday as an unexpected surge in the US Producer Price Index for July rattled investors and reignited concerns over persistent inflation. The PPI climbed 0.9 per cent month-over-month, far exceeding the consensus forecast of 0.2 per cent, and pushed the annual rate to 3.3 per cent.

Analysts attribute this jump largely to businesses beginning to pass on higher import costs from recent tariffs imposed by the Trump administration. Core PPI, which strips out volatile food and energy components, also rose sharply by 0.9 per cent, lifting its yearly figure to 3.7 per cent, the highest since March.

This data suggests inflationary pressures are broadening beyond consumer goods, potentially complicating the Federal Reserve’s path to easing monetary policy. The Bureau of Labour Statistics highlighted significant increases in produce prices and services, underscoring how trade policies are filtering through the supply chain. This development highlights the double-edged sword of protectionist measures.

While tariffs aim to bolster domestic industries, they often translate into higher costs for businesses and ultimately consumers, fuelling inflation at a time when the economy is already navigating post-pandemic recovery challenges. I believe this could force the Fed into a more measured approach, balancing growth risks against the spectre of resurgent price pressures.

Treasury Secretary Scott Bessent added to the market’s uncertainty with his clarification on recent remarks about interest rates. On Wednesday, Bessent had suggested that short-term rates might need to drop by 150 to 175 basis points to reach a neutral level, sparking speculation about aggressive Fed action.

However, he emphasised yesterday that he was not advocating for a specific 50 basis point cut in September, instead pointing to economic models that indicate current rates are too restrictive. Bessent reiterated that his comments were observational, not prescriptive, telling interviewers that the Fed should consider a gradual reduction, perhaps starting with 25 basis points before accelerating if needed.

This backpedaling came amid criticism that the administration was pressuring the independent central bank, a recurring theme under President Trump. Market-implied odds for a September rate cut, as tracked by CME Group’s FedWatch tool, adjusted back to around 90 per cent following Bessent’s statements, aligning with levels seen before Tuesday’s milder CPI release.

Also Read: The perfect storm: Jobs plunge, tariffs hit, and crypto volatility soars

Prior to the PPI data, odds had briefly surged toward certainty for a cut, but the hotter wholesale inflation figures tempered enthusiasm, with swaps now pricing in about a 96 per cent chance of at least a quarter-point reduction. From my perspective, Bessent’s interventions, while data-driven, risk undermining Fed credibility.

In an era of heightened political influence on economic policy, such public commentary could erode investor confidence, especially if it leads to perceptions of policy interference. I think the Fed will proceed cautiously, prioritising data over rhetoric, but this episode underscores the tense interplay between fiscal and monetary authorities in 2025.

Equity markets felt the brunt of this mixed sentiment, with Wall Street’s recent rally stalling as major indices closed essentially flat. The S&P 500, NASDAQ, and Dow Jones all hovered near unchanged, reflecting a tug-of-war between optimism over potential rate relief and worries about inflation’s resurgence. Investors appeared to shrug off the PPI surprise initially, but as the day progressed, profit-taking emerged, particularly in tech-heavy sectors sensitive to higher yields.

Bond markets, however, reacted more decisively, with short-term US Treasury yields climbing sharply. The two-year yield rose six basis points to 3.73 per cent, while the benchmark 10-year yield settled near 4.29 per cent. This inversion in the yield curve’s movement signals renewed bets on a less dovish Fed, as traders anticipate fewer or smaller cuts if inflation proves stickier than expected.

In Asia, the Hang Seng and CSI 300 indices surrendered early gains to finish down 0.37 per cent and 0.08 per cent respectively, as regional investors locked in profits from the prior rally. Today’s early trading sessions opened mixed, with some indices edging higher on hopes of global stimulus, while US equity futures pointed to a similarly uneven start.

My take here is that this sideways trading masks underlying fragility. With tariffs amplifying cost pressures, equities could face headwinds if corporate earnings begin to reflect squeezed margins. I remain cautiously optimistic for tech and growth stocks, but only if the Fed delivers on easing without stoking further inflation.

The US dollar capitalised on the higher yields, rebounding 0.4 per cent on the Dollar Index to recoup recent losses. This strength pressured commodities, with gold dipping 0.6 per cent to close at US$3,336 per ounce, as a firmer dollar and elevated rates diminished its appeal as a non-yielding asset. Oil prices, conversely, bucked the trend, advancing 1.8 per cent to around US$67 per barrel.

This uptick stemmed from dim prospects for a breakthrough at tomorrow’s US-Russia summit in Alaska, where Presidents Trump and Putin are set to discuss energy cooperation, sanctions, and geopolitical tensions. Officials from both sides have downplayed expectations, with Trump warning of potential consequences for Russian oil exports if agreements falter. Harsher sanctions could disrupt supplies, pushing Brent crude above US$80 if tensions escalate.

The summit, hosted at Joint Base Elmendorf-Richardson in Anchorage, marks a high-stakes diplomatic effort amid ongoing conflicts, but low hopes have traders positioning for volatility. In my opinion, oil’s resilience here is telling. Geopolitical risks often trump economic data in driving energy prices, and with Russia’s role as a major exporter, any summit fallout could exacerbate global supply strains. This as a reminder that energy markets remain vulnerable to non-economic factors, potentially offsetting any demand slowdown from higher rates.

Also Read: Laundering, layered: The strategy, psychology, and mistakes of crypto thieves

Amid this macro turbulence, the cryptocurrency market presented a contrasting narrative, with Bitcoin demonstrating remarkable strength. The flagship digital asset surged past US$124,000 overnight before retreating to approximately US$120,991 early Thursday, still marking a 0.6 per cent gain over the past 24 hours. This move initially rode bets on Fed rate cuts fueling risk assets, but momentum waned post-PPI, as inflation doubts clouded the easing outlook.

A key on-chain indicator, Bitcoin’s realised price, has overtaken its 200-week moving average for the first time this cycle, a crossover not seen since 2020. The realised price, calculated as the realised capitalisation divided by total supply, represents the average cost basis of all Bitcoin holders, essentially the price at which coins last moved on-chain. Currently, this metric stands above the 200-week MA, which averages Bitcoin’s closing prices over roughly four years to gauge long-term cycle trends.

Historical data shows this flip coincided with the onset of the 2021 bull run, maintaining the orientation until 2022’s downturn. In the 2017 cycle, while no full crossover occurred, a retest propelled prices higher. Analysts like those at Mitrade and AInvest note that when realised price stays above the 200-WMA, bull markets tend to extend, signalling sustained holder profitability and reduced selling pressure.

This crossover, shared by analyst Van Straten via charts spanning the past decade, illustrates how Bitcoin’s uptrend has naturally elevated the realised price as investors transact at higher levels, repricing their cost bases upward. The graph reveals a clear pattern: the metric’s surge above the MA often heralds prolonged uptrends, as it indicates the average investor is in profit, discouraging mass capitulation. In 2020, the timing aligned perfectly with the bull market’s ignition, driven by institutional adoption and stimulus. Even in 2017, where realised price never dipped below, a touchpoint sparked explosive growth.

Recent X posts echo this bullish sentiment, highlighting the three-year milestone and historical precedents for extended rallies. From my standpoint, this technical milestone is profoundly significant. In a market still tethered to macro events, Bitcoin’s on-chain resilience suggests it’s maturing as an asset class, less swayed by short-term inflation blips and more by network fundamentals. I predict this could propel BTC toward US$200,000 by year-end, especially if rate cuts materialise, drawing in sidelined capital.

Altcoins, however, bore the inflation hit more acutely, underscoring crypto’s internal divergences. Ether fell 2.3 per cent to US$4,577, Solana dropped 2.9 per cent, XRP slid 5.1 per cent, and Dogecoin tumbled 7.7 per cent. These riskier tokens, often amplified versions of Bitcoin’s moves, suffered as sentiment shifted toward caution, with traders scrutinising every economic release ahead of the Fed’s September decision.

If rates remain elevated longer, the upside case for ETH and SOL dims, as higher borrowing costs curb speculative flows into DeFi and memecoins. Yet, Bitcoin’s dominance in such environments typically rises, as seen in past cycles. While altcoins face near-term murkiness, the broader crypto ecosystem benefits from Bitcoin’s leadership. Innovations like layer-2 scaling on Ethereum could mitigate downside, but patience is key until macro clarity emerges.

Also Read: Trump’s trade war looms, but markets are betting on a Fed rate cut

Overall, yesterday’s developments paint a picture of a global economy at a crossroads, where inflation’s stubbornness clashes with easing hopes, and geopolitical wildcards like the Alaska summit loom large. In crypto, Bitcoin’s realised price crossover stands as a beacon of bullish potential, backed by historical patterns and on-chain data. Drawing from financial analyses, I see this as the start of an uptrend that could define the cycle.

Investors should monitor Fed signals closely, but in my estimation, the confluence of technical strength and potential policy shifts positions digital assets for outperformance, even as traditional markets grapple with uncertainty. This dynamic reinforces my belief in crypto’s role as a hedge against fiat volatility, urging diversified portfolios in these turbulent times.

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Grab Holdings has announced its unaudited financial results for the second quarter ended June 30, 2025, trumpeting a period of “profitable growth at scale”.

While the Southeast Asian super-app giant reported an overall profit for the quarter and impressive growth across several key metrics, a closer examination of the figures reveals nuances and potential concerns that warrant attention beyond the headline successes.

Profits mask underlying cash flow concerns

Grab reported a profit of US$20 million for the quarter, an improvement of US$89 million year-over-year, alongside a record Adjusted EBITDA of US$109 million.

Revenue saw a robust 23 per cent year-over-year increase, reaching US$819 million, driven by its on-demand and financial services segments. On-demand gross merchandise value (GMV) also accelerated, growing by 21 per cent year-over-year to US$5.4 billion.

Also Read: Behind GoTo’s record Q2: The fine print tells a different story

Group CEO and co-founder Anthony Tan stated that the company “delivered another record quarter of profitable growth at scale,” with over 46 million monthly transacting users powering the Grab ecosystem. He emphasised the acceleration of on-demand GMV and Grab achieving its fourteenth consecutive quarter of Adjusted EBITDA growth.

However, despite these positive indicators, net cash from operating activities in Q2 2025 saw a significant decrease of US$209 million year-over-year, landing at US$64 million. This decline occurred despite improved operating performance, offset by lower cash inflows from customer deposits in the banking business and higher cash outflows related to lending businesses.

While Adjusted Free Cash Flow for the quarter improved year-over-year to US$112 million and stood at US$229 million on a trailing 12-month basis, the quarterly operational cash flow dip is a notable detail often overlooked.

Financial services losses widen despite revenue growth

Grab’s financial services segment reported strong revenue growth, increasing by 41 per cent year-over-year to US$84 million, primarily from lending across GrabFin and Digibanks. Total loans disbursed grew by 44 per cent year-over-year to US$721 million, with the total loan portfolio outstanding expanding by 78 per cent year-over-year to US$708 million. Customer deposits in its GXS Bank (Singapore) and GX Bank (Malaysia) also surged to US$1,543 million.

Yet, this rapid expansion came at a cost. Segment Adjusted EBITDA losses for financial services actually increased by 8 per cent year-over-year to negative US$26 million. Grab attributes this increase to higher expected credit loss provisions as loan disbursals increased. While Grab maintains a prudent stance on credit risk, aiming for Segment Adjusted EBITDA breakeven in the second half of 2026, the current trend shows widening losses in this segment as it scales up. This challenges the overall narrative of increasing profitability across the board.

Persistent incentives and rising corporate costs

Cost discipline was highlighted by Peter Oey, CFO of Grab, who stated that “continued discipline on costs demonstrate our ability to generate Adjusted EBITDA growth”. However, the press release reveals that total incentives amounted to US$547 million during the quarter. On-demand incentives as a proportion of on-demand GMV remained flat year-over-year at 10.1 per cent, indicating a continued reliance on incentives to drive user growth and adoption of new product offerings across Mobility and Deliveries. This sustained high level of incentive spending could pose questions about the long-term sustainability of profitability if user acquisition and retention remain dependent on such expenditure.

Furthermore, regional corporate costs increased to US$92 million in the second quarter, up from US$84 million in the prior year period and US$86 million in the first quarter of 2025. These costs, which are not attributed to specific business segments and include expenses like cloud computing, mapping technologies, and shared finance and HR costs, represent an increasing overhead for the company.

Strategic debt and share buybacks: A closer look

Grab’s cash liquidity at the end of the second quarter totalled US$7.6 billion, a significant increase from US$6.2 billion at the end of the prior quarter. This boost was “contributed by the issuance of convertible notes in the aggregate principal amount of US$1.5 billion”.

While CFO Peter Oey stated this “further strengthens our balance sheet and optimises our strategic flexibility,” the structure of these zero-coupon convertible senior notes is accounted for as a derivative liability under IFRS. Grab acknowledges that this accounting treatment “may lead to volatility in profit/loss for the period,” although it states it does not impact underlying cash flows or adjusted EBITDA.

Also Read: 17LIVE’s H1 report shows tough road ahead for Asian streaming pioneer

Additionally, Grab actively engaged in share repurchases during the quarter, buying back 58 million Class A ordinary shares for US$274 million. Cumulatively, Grab has repurchased and retired 126 million Class A ordinary shares for a total of US$499.6 million as of June 30, 2025.

While share buybacks can be seen as a return of capital to shareholders, they also consume cash that could otherwise be deployed for organic growth or strategic investments.

In conclusion, while Grab’s second quarter 2025 results show strong top-line growth and improved overall profitability, the devil is in the details. The decrease in quarterly operating cash flow, the widening losses in the expanding financial services segment, the sustained high level of incentives, and rising corporate costs suggest that Grab continues to face challenges in translating its impressive growth into robust, consistent operational cash generation and segment-level profitability across all areas. The market’s reliance on a large convertible note issuance for cash liquidity and ongoing share buybacks is also worth careful consideration.

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The image was generated using ChatGPT.

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