Crypto Exchanges on the Rise

Transcript

and welcome everyone from Boulder Colorado through Switzerland to Japan welcome very nice to have you all my name is Amy and I'm on the board of the Krypto Valley Association and also focus on security of critical digital assets for institutions at ledger would allow me to share a few words about the Krypto Valley Association before we kick this off and as most of you know we are an exciting global community which is focusing on the evolution of blockchain technology and cryptocurrencies we also have og companies such as the

representatives of of the panel today as members and we are reaching 800 members across the globe soon we are powered by our working groups which were I education investments cyber security regulation startups and beyond and if you are not part of our dynamic community act then what are you waiting for join us and today's event today's agenda is broken down into two parts we are going to have a fireside chat first we are privileged to have Tom Albright who's the CEO of matrix global hi Tom

and we also have a role sewed who is the former CEO or as I'm sorry a former member of Microsoft ventures and he's the CEO of unicorn and he's going to interview Tom in this discussion today and in the second part we will have the panel around the crypto exchanges on the rise with that over to you roll please kick off the fireside chat thank you thank you me thanks hey hi everyone thanks for joining us today as Amy said I'm the co-founder of unicorn and I was

also the creator of Microsoft ventures and and I am a good customer and partner of bit tricks and bit risk levels so today I'm interviewing Tom Tom can you just tell us about yourself and basically the difference between bit tricks and bit risk level yeah absolutely so also I again thank Sammy and we and the entire crypto Valley Association we're thrilled to be part of it and we're thrilled to be here so thanks for having us and thanks to everyone for joining so a bit tricks we basically have there are three entities basically three operating parts around the overall ecosystem we've got you know

bit tricks was founded in 2014 in Seattle in the u.s. it's one of the oldest crypto currency exchanges out there and we've evolved to have the bit tricked us exchange which is still headquartered in Seattle we've got the tricks technology which builds tools and technology for both the bit tricks us and metrics global exchanges as well as some other exchanges around the world and then we've got the tricks global which I'm fortunate to be the CEO of and we're based in Madhu's Liechtenstein and right in crypto valley with everyone else and we service all of the the non-us customers around the world and we're fortunate enough to offer 250

tokens fiat and u.s. dollars in euros and a variety of other interesting things so ok cool exciting yeah so thanks for that listen I know that this this pandemic the kovat pandemic has affected the way we all do business this is why we're here I wanted to know how the pandemic affected the way people think about crypto just generally speaking yeah it's really interesting I think that the how useful and how valuable crypto can be you know the world is changing before

our eyes we're seeing all kinds of changes from you know the explosion of zoom and everyone working remotely to where you know everything is becoming more decentralized from finance to physical work all those sorts of things and obviously that fits in very well with the theme of crypto you know the other thing that I really watch and we're really seeing or the the government responses and from you know the European Central Bank to the Federal Reserve in the US the amount of money printing basically that that's going on with fiat money is just it's astounding it's unprecedented it's not anything you

know we've certainly seen in our careers and and probably for many people's lifetimes people have been around much longer than me yeah yeah like I noticed one of the interesting things was just looking at data you know speaking to some of the folks at bit Rick's about you know purchases that are happening in India for example when people are migrating from from big cities to villages they were there buying insane amounts of crypto yeah and things like that what why do you think that is yeah I think it goes back to the decentralized response and people are realizing that you know the government's with the money printing they're not unfortunately there they're not looking

out for the general population and for people they're looking out for people that are already protected the the billionaires and and you know people that you know owned the vast percentage of stocks and traditional securities you know we see just one example in the u.s. the you know there was over two trillion dollars of money printed in the last couple months and five hundred billion dollars of that ended up right in the hands of currently existing billionaires whereas you know people can't get $1,200 checks from the government so crypto is really an opportunity for people to protect themselves against that and we see it all the way around the world from you know and he said

India to Africa and even into the US so you are seeing a more interesting big point obviously then through this endemic absolutely yes yeah okay well it's interesting I you know I think again you're right the way businesses are changing is pretty incredible you know like even in in Las Vegas when they shut down all the casinos they they didn't have didn't have locks on the doors until now you know and they had to actually put locks on the door 24/7 yeah so so hey so besides like when I look at exchanges in general you know as a platform that builds a token for you

know for eSports and and betting and that sort of thing besides being in exchange what is it tricks do to help companies like ours or token teams like us you know to innovate yeah absolutely so I think you know I love the the theme of this panel and where we're going with exchanges you know we've traditionally been focused on allowing trading and things like that but I think the really the next step in the evolution for crypto in general and for exchanges as a whole is providing those use cases for people and that's really what we're working on right now is allowing our

customers to have access to all the exciting new products that different people are building and you know letting them use their crypto and in all the different ways to both within and around the traditional financial system I really take advantage of all the features that crypto has okay well look you know I would be remiss if I I would be miscible nothing but I've heard some things about it I haven't heard a lot about it but I've been hearing a lot about bit ryx levels new token that's coming bxd you guys really haven't said much about it yet so can you just tell us tell us more about the XD I'll be honest I do know about it but I don't

know you everything about it so I'd love to hear what you have to say and then we'll yeah yeah absolutely so we are we're obviously really really excited to be rolling that out it's something we've been looking at and working on for quite a while now and it's been a customer request for for a long time it's going to be our native token it's going to enable a lot of utility on the both on our platform and on partner platforms as well you know from lower trading fees to rewards and airdrops for holding the token added referral bonuses holders will benefit from a token burn and then we'll be adding a ton of new features

around it like staking lending voting on things on the platform things like that so we're really excited to roll that out this summer and everyone should stay tuned to our social media that's that's awesome so you know when I think about tokens typically the exchanges in the past would would would launch a token and then build an exchange around it whereas bit tricks was founded in like 2014 and you guys are finally building a token what was the reason for waiting yeah that's a great question I mean what we're really focused on is the you mentioned the use cases and and we think that the token not only does it enable a lot of interesting things on the vitter

Explo Bowl trading platform but on some partner platforms as well and I'll just go out and say it here we're very excited and fortunate enough to be partnering with unicorn to launch our really our first use case which we're super excited about super excited about we're calling it crypto gaming it's going to be an exclusive product for vetrix global customers where they can use their crypto to bet on and sports live sports eSports casino games all sorts of things like that and the XT is going to enable a lot of special offers for those customers as well so it's a token that we'll be able to proliferate and be used throughout the whole

ecosystem and through multiple use cases starting yeah yeah yeah you know I've been talking to some some of the big blockchain investors in the space and they're saying this is probably one of the most anticipated tokens it's certainly the most anticipating 2020 but I'm pretty excited about it so it's great to hear hey so Tom look you know we we have a limited amount of time I just want to ask you one last question what keeps you up at night well I've got two very small kids so first off they keep me up in with the feedings and diapers and things like that but you know it comes back to you know what we're seeing around the world in the society is changing in front of

our eyes we're seeing you know horrific government responses to people trying to change the world for the better you know we're seeing the you know protected class really cracking down on unprotected and you know what I what I hope for and what I really wish is that you know we can change the world for the better and that this you know everything that's going on right now doesn't give those empower an excuse to actually crack down and make things worse you know that that's the big fear but I think with you know the crypto community with you know the communities around the world that are standing up and fighting to do the right thing to support the

black lives matter protest to crackdown against or stop police brutality and all those sorts of things I you know I'm really optimistic that we can all make this world a better place so awesome thanks man I appreciate that taking the time and thank you no thank you and thanks to MA and the entire crypto Valley Association it's it's fantastic to be here thank you so much tom and thanks to all I'm putting my hands together for this nice introduction and I love your choice of background for those of you who don't know that's a landmark in Liechtenstein and Tommy is already there I think it seems like that wonderful we already have or the

participants of the second part online which is going to be the panel I told the rise of the crypto exchanges and we are pretty excited to have secured some of the longest standing crypto exchanges of times and some of the leading exchanges among Jews but to mix this up we also have Doulton from the London Stock Exchange and in the light of the current make micro sorry macro economic landscape it's crucial to keep a close look to what is really happening to these exchanges and also to talk about their innovation their

expansion plan the competitive landscape so with that I invite you all to to turn on your cameras and the mics and please tell us your name your function and the company you work for and also what does your company focus on today in the digital asset space Stephen you want to kick this off sure so you've heard from my colleague Tom but I work at metrics global where the part of it wrecks the service is all the non-us customers based in Bedouins thank you Lucianne thanks Amy for introduction yeah so I joined Kraken

almost a year ago person have been in crypto since almost seven years now I cover accounts high value accounts for Europe and Switzerland and Kraken as it's known is one of the oldest theater crypt exchanges in the industry we are active all across the globe embrace 60 plus countries and we are a pioneer when it comes to execution security and also regulation we are one of the first world exchanges to actually and pass a cryptographically verifiable proof of reserves audit well the first ones to display our price date on boom burg and finally we are also pioneering products

such as leveraged margin trading regulate derivatives and index services in the crypt industry thank you so much No - no hi everyone and so yeah my name is Dalton I toasted emerging technology and innovation strategy at the LSE G which is obviously an exchange I'm sure most of you are familiar with and a lot of my focus is on but blockchain and crypto related initiatives across the group we also do a lot of work and in collaboration with fintechs and institutions across the space and we're really keying mostly into the kind of digital assets use cases of the technology so we do have some projects related to crypto so one

example being an indicative and index on the on the 4c side of the business and but yeah as I said as I said most of our focus is purely on any kind of and digitization and security side of side of things thanks so much Maria are you there I'm here hi thank you me everyone I'm Maria and I'm country manager Luna Luna is a global cryptocurrency company we're operating in over 40 countries worldwide across Southeast Asia Africa and Europe our wallets and exchange an API for businesses we just make it easy and and seamless to buy and sell cryptocurrencies and learn about

crypto so were founded in 2013 and recently reached four million customers worldwide thanks so much and last but not least Quentin hello everybody so my name is Quentin so I'm in the financial markets at okx so we are one of the largest crypto exchange we are diversified services from spot trading derivative trading proof-of-work exposure up for stakes and there are I focus on building the institutional business so I need the decision business for Europe in u.s.

along with strategic partnership misty fabulous so 2020 has already kept some surprises and we are not even at the end of h1 and so many incredible events has happened one of those when it comes to to a critical digital assets into the crypto market is the event of March 12 and I would be very interested to to learn and if you could share Quentin and Lucy on that how did that affect your company and then a second question tying into into the outstanding events that

how bad the virus has been copied how how did that affect your business si and did you experience any spike when it comes to new signups in members or did the transaction number go up insanely and also which geographical regions have experienced this de spike you want to start Quentin yeah sure I want to focus on the march 12 event I think it was very very interesting so you know everybody was saying that Matisse's and cripples are like completely uncorrelated to traditional risky assets but what we experienced before that event was the BTC become is

increasingly correlated to to the equity market and as the week's the trend x-pac's which was implied volatility on BTC like a not following that so we had a risk of major sell-off in the traditional market and it's followed basically when the BTC just the same happen but it was amplified because of derivatives and especially one exchange bit max for example where we have this auto deliver aging which is very unique to derivatives so market went down people were automatically closed their position and the actions had to

liquidate on the market and it implied the bond or a train the volume were absolutely incredible for example on okay yes we had a volume on the BTC futures about 16 1 6 billion US dollar which is more than twice on normal volume it was the same across all the exchange and it creates is really lucky it was a test for in terms of capacity our ability to process all the volume our best ability to to handle the client request manage their cash account so for us actually we handled that I think very well and what we saw is that the open interest in the in the crypto derivatives went down by 1/2 in the

march surgeons and since then it has slowly that picked up and what we saw is that there were a rebalancing actually only crypto directive open interest to other exchanges and I think okay AXA overall is done pretty well and we have been winning a lot of a lot of trading and since actually recently in 1st of June actually we hit the mark of 1 billion open interest on our futures and swap market so that at solar I think I want to say on this event but video but the it sugar some question about the market infrastructure of the of the crypto averages thanks so much listen you know we did

see a record trading volume happening 1.5 billion on the spot site we are very proud of how or exchange performed over this difficult time as I did not go down once unlike competitors that Quentin has already mentioned I would add Derry bit here as well to the candidates we saw high trading volume in Bitcoin USD and Bitcoin euro trading pairs totally agree that the sell-off in traditional equities had a high impact on crypto assets and as a consequence ya was ballooned by derivatives markets in

crypto but his competitors we did see also a lot of force liquidations on our competitors we did see Liquidators on dye where auctions were one with zero dollar bits on a personal level many in our company and also many private investors Saudis big son of a huge file opportunity and a lot of us kept buying Bitcoin at his Lowe's and and yeah so about Kabat maybe quickly we did see a big dramatic increase dramatic increase in user forum is back Thursday and we saw like really really big inflow in New

York on applications and verifications and everybody was what wanted to buy at such such a big discount at finally last note had a report in May saying that a number of investors released Europe on one Bitcoin we should all time high which i think is a really good sign for the overall ecosystem proves that to see the mystery is getting more robust and we see positive times ahead finally on the geographic breakdowns we I cannot keep a typical number so much positivism in in in your response and also before

Quentin pretty pretty nice to hear that okay acts did not have any major down time began I would like to remind the audience that you can throw your questions into the Q&A and at the end of the panel we will unmute you and then you can ask I will select the three or four questions depending how much time we have my experience when it comes to exchanges was was with shape-shift which is a crypto to crypto exchange and and I remember how much we listen to our customers requests and customers voice in I feel like Luna does that a lot from day one constantly responding to

customer needs and and Luna has been founded in 2013 as you shared with us Maria and could you tell us more about your key market also what is a typical Luna user is like and which are the demographics but what you are present you have a presence on would be very interesting to hear a bit more also how is life at Luna the floor is yours sir so as I mentioned earlier we are operating in over 40 countries worldwide and we have a strong presence in emerging markets that's where we first

started in 2013 but so there is no real typical dunno user we do speak to customers regularly as he said and the backgrounds and demographics and they're the reasons to to enter the cryptocurrency industry are really different and really diverse as the adoption is growing and I think now it's also extremely important and a parent that's you know people are looking at crypto from a very fresh perspective due to the unstable financial environments and you know receive we fear financial analysts and traders openly voicing how Bitcoin seems more interesting as a hedge against currency debasement you know we see more printing

money printing and ever so suddenly this all applies to look to across all markets it's not just the emerging markets where we always had seen sylheti in in cryptocurrency investment in that sense so I think that when we talk about typical customers we always have to take into consideration the spectrum of you know a great versus need and and the the you know those who make an investment is an alternative to their portfolio and those who actually are proactive cryptocurrency or general traders and I think that's what we are seeing across the board though that trust and instead of very simplistic and smooth onboarding

process and and mobile application really helped with with that adoption so really fast onboarding local payment options are have really I think you know rich stats for a lot of customers and we see an uptick definitely as well and among the customers who are willing to just buy to make a recurrence purchase of Bitcoin even if it's as little as 50 or 100 years a month which is I think really really encouraging as well as seeing you know the big trader is taking the opportunities from the big from the volatility etc and in terms of exchange customers you know Europe

becomes more interesting for us in that sense it's it is quite a populated crowded market but we do try and find ways to tailor this experience for our customers high-volume customers in through if it's you know there are fees if it's their account management dedicated customer support or if it's just beating the the fees of other exchanges exciting thanks so much so it sounds like you know is the perfect entry to crypto for retail players and and I do have a little cat for disclosure so the next question is going to be dedicated to Dalton and also

Stephen and we would love to hear what's the current state of play around the lungo stock exchange when it comes to digital assets and Stephen if after doting responded if you can share that what is your main goal in Europe because you have been recently moving to Liechtenstein you are making this - hot water for Beatrix global we would love to hear that that what are you looking for with with this move but before that before that Dalton if you could respond to my question and so I probably write my answer into two parts so one being you know view of digital assets in the

context of digital securities or kind of your traditional financial instruments and then separately on the kind of crypto side so I'm in the form in the former case you know as I said you know capital formation is very much our bread and butter you know and traditionally you know we kind of see ourselves as a financial markets infrastructure provider so you know we have a range of businesses and that essentially support that and a lot of the focus we've had is it's looking at you know the future landscape those capital markets and how we see you know the end-to-end digitization of a value so we've been looking and post rate settlement in the FC sandbox specifically because we kind of see that as being the biggest gap for enabling the kind of quote-unquote

security tokens and and so so we've done some exploration there a continuing along that thread we have some other projects looking negative and things with a kind of clearing sign-ups we only at the London Clearing House and so there's some aspects there that we've been doing a lot of analysis on around you know the benefits of digitization around kind of collateralized collateralization and collateral management specifically and looking a bit on it on the crypto side much of our focus has been pretty much on supporting the ecosystem where you know we have same capabilities that can add value so you know we have a technology licensing business but I'll say IT and much of the work we've done

though is very much in providing the same you know high skill and high speed matching engine technology that we leverage for our markets to participants across the space so you know a recent example of that would be the Acton exchange over in Hong Kong licensed our technology and then on the other side we also provide market events technologies and tools to help businesses to essentially and employ the same level of rigor that we do in terms of combating on mitigating the risks of susceptibility of market manipulation and to to crypto markets in the same way that we do in the regulated markets and that we re supportive facilitate so these are some of the areas that we've been exploring obviously I mentioned earlier as well and on the data side of

the business and we have launched an indicative crypto index specifically and we're looking to kind of take that forward in very very close consultation with regulators in the US and in across Europe thank you darlin great so I guess it's my turn so I think just just rephrasing since I didn't do the the advertisement for Patrick's at the beginning like my colleagues you know the the exchange was founded in 2014 so we were one of the oldest exchanges and we're highly regulated I mean the exchange started in Seattle in the United States the founders I think what differentiates us from some of our competitors it's immoral durand a good way I think you know the management team

is in their 40s and 50s you've got people with real experience in real businesses the founders were all came from Microsoft and Amazon so very much into security and highly regulated so I think as you know the regulatory environment in the u.s. is a bit uncertain and it's difficult to actually run some of the businesses it's you know again not that we don't like regulation but when you have 50 different regulators and there's no coordination that's difficult to get clarity so we'll be decided to do since a lot of our clients listing teams are not in the United States was to put our non-us business clearly outside of the US and really bifurcate that you so the first step was to put the business in Malta and what happened was if you were a US passport holder or u.s. resident you had

to become a client of the Malta exchange and that allowed us to do activities that were completely legal in the EU but where there's not clarity in in the u.s. the reason we moved to Liechtenstein it was to continue to build on that the type of you know regulated framework I think that you know when Malta is very you know popular in the crypto world but I come from the traditional financial services industry I've worked in firms like Goldman Sachs JP Morgan London in New York malts is not a place where anyone's doing any financial services business and in fact we've had feedback from some of the banks in Zurich who want to trade with us they can't take multi-country risk so the very fact the yeren vultureman's you've precluded yourself from numerous

institutional clients so we decided to upgrade to a sort of what I would call first world financial center no we looked at Switzerland we looked at the UK and I think the reason we chose Liechtenstein hey we wanted to be in the EU which shines the EEA but for financial services like banking investment management that's all fully u-pass porting its triple-a rated country so you basically have all the benefits of Switzerland and you're in crypto Valley but then you also have the EEA memberships we saw that as a real win-win plus they were about to pass a blockchain act which just passed in January so we moved our entire business to Liechtenstein it's run out of bad news no we have an office we're staffing up there and basically we're supervisor

already by the FMA which is a European bank regulator we're in the process of filing for the registration under the blockchain Act which you have to do by your end so we we know that the clients that really value that type of onboarding and kyc and AML which is required by FMA meeting standards that's the type of business we want to run so we give safety to our retail clients and we give a really secure platform for our institutional clients that's at a high level what we're doing with Liechtenstein then in terms of just product offerings and things that Patrick's is doing and we've always had we've been known for having a lot of all coins you know far more than competitors except for maybe by Nance but you know

we have hundreds of all coins what we're doing is we're back filling some of the capabilities which we hadn't done so we now have credit card or onboarding 170 different countries now offer euro trading heads we have euro pairs we're about to launch derivatives so as you know derivatives or securities in Europe we don't have a securities license we're only going to sell them outside of Europe we're setting up an entity in Bermuda which is going to be BMA regulated for derivatives trading specifically and as Tom mentioned already we have a token coming which I think we're probably the only be what I would call regulated exchanges to have a token so we have a lot of interesting and growth and functionality that we're bringing you to the market not just a move to

Lichtenstein thank you for that beautiful round answer to go Sofia autumn in Steven and my next question is addressed to Lucien and in Quentin because you both work for Institute for the institutional arm of your respective exchanges and I would be interested to know that what is what you're looking for in Europe and and specifically in Switzerland what type of clients and and why should they work with you plus if you could also share a bit about the typical user of okx and the typical user of Kraken which of you would like to start it

start this time yes I would say it's really people to generalize on a typical tracking user as we cater to cater to everyone from retail to professional traders and institutions that said I would say commonality of most power especially individual users they already tech-savvy your self-described early adopters so-called oh geez our tools and trading engine in our highly sophisticated and are working both for professional experienced traders as well as the pieces regarding the trading volume our biggest pairs are as expected in Bitcoin or aetherium

Europe or in also in the dollar raining tears unsurprisingly who maintain a couple of banking relationships around to float the newest one is called Hinkel Bank here in Switzerland and we support six currencies USD euro British pound of Swiss franc Canadian dollar Japanese yen we have approximately 30 plus tokens listed so customers have wider choice recently we also launched FX trading and added nine trading pairs that make it easier for trans to execute and neveress orders even faster when it comes now to our mission and vision for

Europe and also for Switzerland this needs to be of course in Europe and Switzerland as Swiss liked to be special Switzerland of course we share a lot of common commonalities when it comes to the Conrad spirit we believe similarly to discretion and privacy but also regulatory compliance we support everything that FEMA and the government including the canton of Duke are doing to promote a healthy ecosystem and we wanna plug have totally role in their play a role in their crypto is designed to drive in these environments some

companies are still in their embryonic state and there is service read in April by the Swiss blockchain Federation that approximately hundred sixty firms are at risk and our company has actually been born out of similar situation and we want to share our experience with regards to develop the ecosystem reach the next stage of maturity now speaking quickly about Europe we are considered the largest exchange in Europe especially with or Europe traded in pairs we started with your early support for your training and is built on that by

adding new as it's improving our engine adding new products the recent one was our nine figure position of the FSA regulated a company called crypto facilities which gave us derivatives are regulated through this platform and the industry-leading indexed service thank you so on the side I'm in the typical client that I'm talking to is trading firms and we do have like a two type of trading from Java it had a crypto native so the on the younger side data scientists and they started to trade crypto and they found some interesting pattern and that they are really trading activity hfts on crypto derivatives and the second

category is more like experienced trader where at large banks before big your hedge funds and now they have enough or the other dedicated desk for crypto and the typically trade many of them to do some form of market making strategy start up and and it's they trade large size usually with some latency needs in term of like a speedo so that's the typical clients that my team is dealing with we do see like some very talented challenges in in Switzerland actually and we see more of them around the Sri Kazu garea so we can see that the Israel they have been like big firms on already

switched into crypto like they are really new guys or just it's not a very very active and dynamic market in Switzerland what's the end goal as well for Switzerland I think it's a Switzerland is very strong in structural products and it's really like they're they are branding butter and you have like a very strong wealth management industry that is now like switch into to incorporate Kryptos we do have an option market we launched Italian options like one week ago and we're going to launch the u.s. options and we're having lots very interesting discussion in Switzerland as well so how we can supply liquidity for the for the structure such a product business so it's a very strong

strong angles arts that we want to push now in Switzerland perfect thanks so much for for these insights to both of you so before we move on now I would just love that each of you I just say one or two words it's up to you we the question is that if you have to name just one big challenge what you encountered on in the always evolving crypto world then what would that be you can name max to you but but I prefer if you just named one and can we can we do this exercise just really like one or

two words Maria you want to start one or two words well definitely for our company the biggest really crucial challenge was Malaysia it used to be one of the biggest markers and 2017 and then suddenly the whole industry just came to a halt everything stopped so now we're licensed and the Securities Commission is really positive about the industry and etc but having said that all of the effort that the companies go through doesn't really necessarily translate into banks wanting to welcome companies like ours with open arms and so on so the next the challenge of now is is education and you know driving that

awareness and making sure that people who are and institutions that are still quite scared and of Bitcoin cryptocurrencies you know sort of jump on board thank you could Stephen go next biggest challenge yeah I think it's not specific to us I'd say to the industry it's you've got the old guy or doesn't you can to crypto says that we're terrible so for instance Goldman just came out and I publicly refused to work for them and I came I publicly refute it so their comment that bitcoins terrible they dug up their old report from two two years ago it's not even a new one

but what they don't do is they don't disclose that they can't make money out of crypto off of their clients so that's the religion and uh I think that we have as an industry to face that the entrenched sort of cartel who doesn't want us to do well because we're a complete threat to their very existence and they will spread misinformation and fear which is not helpful to anyone so I think that type of thing which again we're very vocal where we will correct them when they don't show their true sort of agendas or they don't clarify that they can't charge fees on crypto thank you doctor yeah I I think being part of the old guard naturally I think our biggest challenge is very much one

of regulation and let's say compliance you know you know being a heavily regulated industry we have to operate with kid gloves when dealing with a lot other stuff you know most of the crypto market is unregulated so it's very challenging a minute we are definitely seeing on the institutional side a wave of interest and growing interest in you know some of these these new RSX and i think you know that will continue to progress and break an institutional adoption will continue to increase but for many businesses like ours and some of its on the larger banks and another participant crystal space we have to tread very slowly and very carefully make sure that we keep the regulator's onside and comfortable with how we progressed in that you know such anything from InfoSec to custody - you know settlement declaring - you know

every every single area so thank you for naming the elephant in the room I would have certainly said regulation Quentin I fully agree with everything that were said so I would had the to world would be safe heaven because we did see that the crypto asset class was considered by many as as a risky asset same as the traditional assets think for the story that we have to look for now is that the market of all will will start to treat this asset differently will it become like fully uncorrelated and will people

will agree that the economics of those assets do protect from the impact that we can see under said currencies by the monetary policies that we are being implemented by all the different subtle banks and many people are kind of putting some very high expectation we had a full trade off like we thinking that it might well be the case but I mean it has a story is to we'll see if it happens to be true but I do think it's the major theme that we need to look at on top of everything that I said thanks Quentin so to mix things a bit up I'm going to take a question now from the audience and I invite my colleagues to unmute and see who has an interesting

question which I also wanted to ask you guys so can you hear me and see please unmute yourself yes I am here Hayami oh hi Nikki I didn't know that you actually such an exciting panel so the question that I wanted to ask is how do you see this increasing competition shaping the crypto exchange space I mean obviously there are now really major crypto exchanges offering amazing services so do you foresee any decrease in the trading fees or do you think that exchanges will innovate with more services how do you think they are

reacting to this competition and how are they trying to take more market share who should answer your question it's a good one um how about I would love to hear from Lucien and maybe Maria because she represents a different little bit of different demographic and segments Lucianne you wanna go first I'd like to have a second on this one okay Maria are you you feel like sharing a few points here and yes sure so in terms of how we go about you know

becoming entering countries or regions where the competition is really high we do we do think that the mobile experience the simplicity of UX and UI and and really a localized experience is really important so I personally was covering our Italian and French markets and we put a lot of effort into making sure that we that we just don't roll out the platform everywhere as it was in South Africa when we first put it together and and that includes all the features you know across the board we just wanted we wanted to make sure that we speak you know the language of our customer in the particular region that

we offer local payment options that we have relevant content that we have that we appeal to the to the you know demographic that is particularly interested in cryptocurrency in a given country so I think that this bespoke sort of localized experience is key in terms of fees I mentioned earlier that when we do want to go after you know big traders and and and and we want to make sure that we're more competitive we do offer services like more you know dedicated account management services lower fees as well just to make sure that we beat the competition market so I see I see this happening as well on the

trading fees side but it's all about innovation and you know listening to your customers and that's how inform our product roadmap so so so we continuously ask and to to make sure that we actually working on the you know implementations and features that are actually in demand and that will be the game changers and that are missing in our competitors I hope that answers the question thank you so much Nikki does that answer give us yeah and Nikki where are you sheltering I am in Italy and I'm very lucky to be in because it's nice and sunny and our quarantine is over so life is returning to normal and we can go to the beach Wow very obvious thank you Lucien would you

like to to answer the competitive landscape well this is a nice handle but since I'm original Italian but I mean what in half a year yeah so I mean been around for such a long time you've seen many competitors come and go we always keep an eye out for our competitors at the same time we believe that you're a unique position given our strong brand which is build on our the pillars of our great service around customer simplicity security and also our robust infrastructure we build also we believe that the total addressable market is so large that there is room for everyone

the market cap is is huge and there is no shortage of competitive competitors of course we classify them of course as well to regulate that unregulated exchanges roll pitches and other service providers but we believe all in all the market is so so it's so big and it's just the beginning that there is really room for everybody that's such a such a nice and and cooling response and I really believe that that you're you're correct here the next question I would like to ask from Stephen and would be would be nice if you could share about your custody solution because as being an OG exchange and and being the custodian of the keys

you must have resilient in and robust solution in place what comes with a nice government governance and management and in East to scale so if you could share a few thoughts on this sure I can talk you know high-level I'm not gonna go into too gory boring detail but you know again repeating what I said before the founders of our company and our companies privately held there's no outside money there's just three co-founders they all used to run security for Microsoft and for Amazon and that's a bit racks of security is built upon so that's the same team we've never been hacked we have you know we're you know we're a bit let's say not as

good as mark at marketing than some of our peers we're getting better at it so we're we have all the interesting things to talk about but we just haven't but we are probably the world's third largest custodian of Bitcoin and as it is we have massive amounts and everything stored in our you know cold wallets and in terms of cold wallet solutions we have insurance we have the most insurance of anybody in the world Lloyds given us 300 million dollars of hot and cold wallet insurance so that's something again some of our peers are very vocal and have less than we do we have the most so I think that speaks for itself I don't need to say anything else on this topic I would have had a follow-up question that when you're saying that most of most of your assets and our core story so if you go storage

they're stored not stored in our wallet okay thank you great then I think what we should not miss talking about is education because so many CEOs or CEOs such as Krakens c-level always stays and read it on crypto Twitter you can you can read it actually all the time from from other main players in the field that education is what they spend a significant amount of their time and I would invite Maria to to tell us what is what you are doing with Luna in in the field of education how are you educating your clients or

community the new entries and illusion if you give us will share a few thoughts after Maria um so we really do give a lot of focus to education and we approach it in two ways one is face to face and the other online so face to face it means a lot of events with country teams where we do a lot of community building with road shows and in educational institutions we do community events meetups and obviously we lock down this husband this has all moved online and and but we still do hold a you know an active dialogue with our community and then second area is has always been online and we invest quite heavily in producing

content in different ways and forums whether it's our blog or medium steam whether other publications and and videos too even most recently a documentary that we published about Bitcoin in Africa available on Amazon Prime so so we're also experimenting with with different distribution channels most recently with Spotify we create news videos we really put our YouTube channel we interview you know also industry stakeholders we we do podcast so a lot is you know it from trading tips to really you know Bitcoin 101 you know sort of for beginners to

staying up to day with crypto we really want to cover the most common questions that the community may have thank you so much I love that you have such a such a big presence in Africa someone just in the questions that how about developing countries African Latin American and I do know for a fact that you are present in Nigeria and I think Zimbabwe South Africa in South Africa Uganda Nigeria and Zambia thank you so much Lucy on how bad Krakens education the crypto 101 is is one of my favorite go twos on YouTube

thank you very much and if you would have asked a question before about the complications in mind for us education is the solution to our sort of whereas issues medication is a really important topic to us you know on the forefront my colleagues in account management or fantastic job in helping our clients and also educating our clients sometimes so big thumbs up to my colleagues there watching then of course our funny and friendly you teapot podcasts which are being done by our sea level Yugi is Jesse Christina Nick also do a fantastic job in educating people on crypto if you didn't subscribe

yet do it it's a really fun then we have our track intelligence team which post regular blog posts on crypto topics and the flagship LAN flipple utility report where there's a lot of in-depth details on the status of the crypto market also we have our security labs which do a fantastic job in is covering and highlighting showing system vulnerabilities that they discover in the industry make sure to check out can I secure comments while it's real easy to check and improve on your personal security there and finally we have a quite a big vast number of support

articles on our in general on a website where people can educate themselves and all the public's fabulous thanks for that around ants were and with that we arrived to the last question what I am asking and then we go over to the audience and they will have the chance to unmute themselves so already in 2020 so many a man days did happen and this question is addressed to everyone do you see that your company is going to grow through through a manie's in in the next 12 to 24 months or you see Roger that it's going to be an organic growth through maybe extending your offering or

median Turing new markets and I would invite Maria to us were first to this question thank you I mean so I think that it's a it's really interesting it's an interesting time right now it's there's so many we're experiencing so many shifts in the industry in the world one being obviously that we're in the midst of uncertainty with corvid pandemic with governments printing more money with people are doubting you know the financial infrastructure so as well as the fact that we're all so 10 plus here is now after the the birth of Bitcoin and and there's been a lot of progress that happened in our industry around applications use cases so I we

did see a lot of growth in the in the last couple of months but at the same time we also have to acknowledge that our industry perhaps may be even more uncertain than than others so it's we've practiced this a lot and I and I'm really proud that we you know we proved to be easy agile and to adapt and I think those are really you know the big sort of focus areas and qualities that are important to the team as we've got to be moving forward in terms of M&A or versus organic I believe that you know we there's it always depends on where you can really build within your company and what you can't and I think this you know there's a lot of things that we can really do ourselves and and and I think that's probably going to be moving

forward muttsy developing in an organic way but but at the same time you know when the opportunity presents itself I'm sure that you know if it makes sense that's then and there's structure to it I think that you know we would be able to also consider um you know different avenues however um you know we're still working as usual we made sure that we adapts it to to the to the current reality so that we don't have to let anyone go and we can hiring you know teams and people as necessary as grow and we're opening new markets in Africa you know so so there's a lot of exciting news we're keeping ourselves busy but we'll see what the future holds

Thank You Maria exciting news doulton can we go on with you please so and maybe this is somewhat tangential to that kind of focus of the panel right no I mean you know it's a group we kind of need deepening emanate a moment and obviously with the purchase of preventive so that's kind of ongoing at the moment I believe we're still kind of to work through regulatory approval as that progresses and you know outside of that obviously we do make from time to time minority investments in businesses that kind of align with a broader strategy or and specific strategies of some of our divisional businesses so you know we did invest in a blockchain focused FinTech called navara and last year believe and and you know we've

continued that relationship in terms of moving forward with them and you know whistle war is opened connecting explore the space and see what's out there the SE c-- rocker that values what's as a group and and how we can kind of you know explore options to gonna say thank you so much stephen would you like to go next sure and ipod is my wife i cut out for a minute the question is are we doing M&A or how are we growing yeah so are you going are you considering yemeni or are you going to mostly grow through your credit card offering or with Whidbey TX how do you see groups and also please state if you're hiring in Switzerland this is this is a perfect audience to to

make people aware that you're growing so the the companies based in I do is from a regulatory standpoint that's our global headquarters but our clients are global I mean truly global we have a ton of mainland Chinese listing teams coming onto the exchange we have mainland Chinese clients Asian clients European Canadian South American everywhere except for the US so that's step one in terms of you know ramping up our product offerings that I mentioned some before we in addition to our about dues office we are opening an office in Zurich as well we're not looking to be regulated in Switzerland because from a Swiss standpoint they the nice thing about licious join is EEA but also the Swiss are happy with it as well so we can do

business all right but in terms of hiring not everyone who's in their 20s wants to live in bad news we found so we we want to have Zurich as a consulting office to the exchange and be able to you know hire so we are very much looking for people in compliance IT marketing sorts of roles people feel free to reach out and then in terms of our functionality we continue to have banking relationships credit cards more currency pair as I mentioned we're going to be offering derivatives and futures out of Bermuda outside of the EU and but what I didn't mention we also were teaming up with a bank in the EU which will announce surely we're going to be able to offer security tokens in inside the EU

so both derivatives and end securities as well so we have a lot of new functionality coming down the road in addition to the token so we just hope that we'll continue to add volumes and grow Wow very nice that that such an OG exchange is moving partially to Switzerland that is that is great news looking forward to having you in in our extended community and for in our close community here in the crypto Valley Lucy would you like to answer the question next of course yeah we're croc Emir always restlessly looking on how to grow

our traffic community you know means both organically while we don't announce new products ahead of time we always are looking on what our competitors are doing and we were speaking always close before dear clients on what they expect us law firm and working proof and then given that we improve our products and services either organically or Nanakuli worth noting that we recently launched ethics training as an example of an organic growth and we are always looking into interesting ways to grow a community Europe Switzerland globally everywhere if your crypto G we are always hiring

have a look at on our website and hopefully we speak soon and you're not hiring only oh geez right okay 80 aficionados so then Quentin would you be pleased so kind to answer the question as well yeah sure so we are growing organically so we are doing a new products I mentioned options for example that these next day to be released the us options but we're also really increasing on the web we partner with the larger ecosystem and we do it two ways so we do commercial partnerships with different players in

the ecosystem we have some themes that we prefer but we're really happy to talk to already and the second is that we do investor activity as well so investment are not public we are busy considering several investment so it's same if your company is fundraising and there are they think that there's also like a strategic alignment with opx but what we do do do talk to us I mean we are very happy as well to enter into discussions and also we are always looking for talented people in Europe backing our headquarter in Asia so same do contact us and we'll be happy to discuss thank you so much and this was my last question takes everyone dear

audience basically dmsr open off or wonderful panelists and I right now Tom and also also Robin if he's dare to turn on your your video because now we arrive to the Q&A and the first question I'm going to take is from madam piers on and please not done if you're there unmute yourself and address your question thanks Emmy I'm hey guys Mason Pearson Smith here Dawson Quinton good to see you guys hope you guys as well question for the for the panelists representing exchanges curious to find out in your

opinion are there two or three products or services that even if you guys don't currently deliver them are there two or three products or services that you guys see as the biggest driver for new our acquisitions and that questions for Quinton Steven Steven I'm a friend of Kwan Park and the big trucks team as well so my question is are there two or three products whether you guys currently deliver again I'm not that you guys see us the major drivers for new user acquisition all right I'll take that first so I think I think that the

the some of the larger volume products now it's just some of the basic stuff like having multiple currency pairs so we just launched euros we want to do sterling and Swiss francs in Bitcoin ether so I think those are just the higher volume products I think you need to have futures so again we're looking for regulated solutions that will work for our clients that's in the works we're hoping to launch this summer in q1 and then I think other than the token securities tokens which we haven't really talked to a lot about that's a huge focus for us and again being a very regulated exchange and having an EU presence we haven't you know in Europe and EU that's portable security token offering in the fall I'll jump in and help Stephen out here as well you know

the other thing that I think we're really excited about and I think that new users are gonna love is the crypto gaming partnership in the crypto gaming product building out those use cases and allowing people to actually use their crypto on the platform where they can buy store trade and use is going to be pretty incredible for people so we're very excited to offer that yeah on also on my side Amina again I really focus on the sophisticated trading firm so I'm not going to cover this question from the from the retail side but we are very excited is that we are working on really launching a pretty cool portfolio margining so what is that is that it's pretty much when you have a different

products on derivatives on different size or different category types such as a perpetual swaps options and features we optimize your margin promised you we look at the correlation between all the different race and we can optimize that and that's really cool for like market makers and for IKEA the the hedge fund and the people who are doing for example arbitrage they can really it's going to be able to optimize as well the amount of collateral that they are posting on the exchange which is currently expensive and that's really limit the trading for many sophisticated participants so it's more like infrastructure development and she can and basic buy boring stuff but it's really to improve as well the ROA business and infrastructure because we saw again in March 12 that's pretty cool

you can launch many new products but if your infrastructure is not able to cope with a incident like that then it kind of defeats the purpose so focus on the basics doing getting it right and they and focus has gone on product innovation Knutson are you there the denims were your question and also I forgot to ask where are you sheltering I think yeah the answers my my question definitely I'm actually sheltering here in the UK so we are shortly us of our quarantined hopefully but due to British weather staying inside actually looks

like the the best option Dawson you can probably confirm that as well yeah the weather is really British little today in Zurich as well the next question will will be from Ryan Ryan are you there please unmute yourself there we go hi there he Ryan where are you calling you from I'm calling from Ottawa Canada oh wow good morning thanks great I posted this on the on the channel but

there's been a kind of a firestorm in the in the media lately about coinbase and potential selling of data to IRS yeah their organizations and just wondered if you guys had any commentary about that or insights into that who wants to take that question seems like seems like okay yeah I'm a traditional financial services system it has been a good source of income to to sell data so

that's been in the tech industry however now speaking of crypto of course also may be coincidence but Switzerland is known for privacy and for keeping data private so it's cracking so I think that the end of the day the user should own the data my first opinion thank you so much Mei I personally don't disagree with that at all I think that obviously regulation is important and following all the appropriate kyc and AML protocols and all those sorts of things but you know overreaching and going beyond that and actively profiting from user data

particularly in a way that seems designed to harm them I think is a huge problem for users for the community and for increasing adoption of crypto around the world thank you so much for that response Tom and and with that I would like to ask a cat arena I mean sorry Ryan hope hope that was a good answer I think that answer responded to your question I Catarina please unmute yourself and ask your question everyone um I'm happy to ask my compliance question you know here in Switzerland we work with institutional clients where we

onboard some of you and it's really sometime very difficult because companies you know the exchange based in different jurisdictions the questionnaire can be a 20-page and more and one of the topics which really bother me how do you address the fe TF recommendation on client certification you know that we are most Rick stricken Switzerland how you can operate as a virtual service provider and do you really test or consider in a travel means protocol will be good to get your opinion on it

who's so brave to take this question this is a I can take that one as well I think it's a definitely a tough question in a heart one and I think the travel role is one of the you know the hardest items that the industry is dealing with in terms of regulation and kyc AML protocols you know with that said we the tricks as a whole or part of a number of working groups that are working on solutions to allow institutional participants and other exchanges to comply with the travel rule as we're required to do so we're working on ways to do that in a way that both follows the regulation and is as least

disruptive to our customers as as we can be but it's certainly a one of the most pressing challenges in integrating the cryptocurrency ecosystem with the traditional financial ecosystem thank you so much Don someone asked she has eagerness to to adhere something if not then thank you so much Tom again I would like to invite Carl too to ask the last question hi everyone and thank you very much father for the great discussion my

question goes around the split between retail and institutional activity so how do you see the split right now in trading activity and what is your expectation going forward also considering the the emergence of digital assets beyond cryptocurrencies so I think this question basically goes to everyone but I would also specifically prompt tonton because you who you mentioned also be interested in the any broader digital s event and then security as security space definitely jump in I mean so specifically on the retail side and obviously that's not an

you know directly at least a domain that we tend to serve and but but you know at least on the institutional side you know as I mentioned earlier I think there has been a growing interest and demand for access to you know the crypto sphere and I think you know starts have continued we'll continue to see that trend grow I think specifically on the security token side so looking at kind of the digitization of and you're kind of more traditional financial instruments again there's a lot of interest on investment there naturally in a way and invested in the space as I mentioned previously you know we made in a solution specifically for the digitization of debt instruments and in the relatively short Nitin and then

you know even if you just look more broadly across the space you know you've got an boss I'm leading some you know leading projects on their side the Australian areas export project you've got nicely backed projects you've also got you know six with some fairly large-scale initiatives there so again there's this very broad interesting in kind of seeing this Mets organization digitization as being the future for capital markets generally and I would imagine you know with that the kind of main the foundational infrastructure for that that and basically brings down the barrier to entry to explore other asset classes that there are your more kind of traditional banks bankable assets so we may start to see the injured digitized mortgages or digitized infrastructure and real estate and

another kind of more exotic glasses of molasses so it'll be really interesting to see how that whole kind of landscape evolves and innovates as it as it grows and as a news forward thank you so much Doulton louisiana where Quentin and I took dots we have a healthy balance between both early adopters professional individual traders and also institutional clients I've called down the road this involves with product as well and I experienced with the introduction of new products such as derivatives the market size would grow

tremendously and will also better with the price increase in prices of cryptocurrencies bringing more institutional interest into the whole ecosystem now that said securitization and other products will make that path accelerated path and we'll see more and more institution players entering the industry I would say yeah just to add on the split versus about we have to sell a bit more than to service incoming from the institutional clients and in crypto an institutional client doesn't mean like the same as traditional finance because it includes like two men in the

garage it means more like they on Bob with us or the corporate entity and it's a broader definition but they are sophisticated traders but to sell in term of volume but but you also have to consider and I'm just adding a little bit on the open interest because I used to work for traditional exchange or the application of Singapore now I'm derivatives a plug development so what you want you want to grow the open interest it's very important to have a healthy derivative market and for that you also need what we call real money so that's why we are because they are holding for a bit longer time period the futures also swap positions so I'm looking really looking forward this year to see like more hedge fund participation

we will do that more like long-term type of trading instead of just HfG because it creates a as whether healthier markets and of course the return markets is super important and a and as a Russian mentioned you just have to way to maintain a very healthy balance between the two tanks Quentin very good point maintaining a fussy balance with that we did we did ask or this was the last question we responded and and as I go through the chat there is one question which actually I'm really curious often and Maria I would love if you could answer that basically luenell has a present globally and and you once were

that in Africa you're constantly growing but how about Latin America do you have any market share there and now at the moment we haven't been expanding to Latin America at all our big focus is is to sort of penetrate the African continent and expand further through Southeast Asia as well I think we have a lot of on our plate in that sense as well you know the in Africa it's turning into Europe wasn't it's not easy but but there's a lot of commonalities around regulation and or just rolling out the product in terms of Africa you know setting up and the relationships with

banks institutions etc it there's a lot of work involved so we're we're focusing there at the moment I know that there within our investors or currency groups portfolio there there is a company that is specialized specifically in Latin America and with a similar mission to to sort of Bank Liam banks where addressing really that demanded freedom emerging markets in that region thank you so much and and expansion in basically not not playing alone in this field is so important so I'm hoping that that a lot of partnerships are going to to take place and the evolution of or

exciting and OH is evolving crypto space is going to accelerate further and further and with that I would love to put my hands together in the name of the audience to our wonderful panelists and thank you all for taking the time and answering these questions I wish you all a good rest of the week and we are going to to close this this virtual series now and stay tuned for further events such as an event on cybersecurity and also an enterprise blockchain coming up to next week's thank you so much and bye from Zurich