http://www.yachtinvestor.com 27°YACHT INVESTOR
that has launched so many financial markets in so
many different jurisdictions, so I understand, to a
reasonable extent what the regulators are going
to be looking for, how to build an operation that
ticks all the regulatory boxes from the beginning
and how to try and attract the right sort of
people to work for the business.
It’s going to take a few years to get all this
in place because the regulators aren’t ready to
fully commit, but they do want to engage with
people like me to hear what is being said before
they come up with their decisions. Normally the
regulators, in a circumstance like this which is
very new, want to interact with people who have
operated markets before to understand how
best to create a market place that is safe for the
investor and safe for everybody in their country.Where have you chosen to launch the exchange
and why?
The exchange is launching in Singapore. One
of the reasons for that is Singapore, from a
regulatory perspective, is trying to encourage
innovation in tech and crypto technology. The
Singapore authorities take the view that if a coin
or token is not a security then it can trade on any
platform that operates out of Singapore. Other
jurisdictions are still trying to decide whether
coins and tokens are securities or currencies. At
the same time, Singapore is proposing to require
crypto markets to follow the same anti money
laundering, know-your-customer, business
and counter terrorism financing controls that
traditional operators in Singapore operate under.
Secondly, Singapore has just released a
consultation paper on the regulations if we ever
want to become a regulated market operator
which is essentially, in old terminology, a stock
exchange. I foresee that regulators around
the world will eventually decide that crypto
currencies and traditional securities should be
traded on a similar type of platform, so Singapore
is once again leading the world and coming out
with a sensible proposition to try to attract and
give clarity on regulatory position to people
operating in this space.
After launching in Singapore, we will look
to start operations (pending all the legal and
regulatory requirements) with a subsidiary in
Australia, a subsidiary in the UK and Europe and
in the Unites States.Are crypto currencies the way of the future?
The exciting thing about the crypto currencies
is that the technology behind it can enable
a change in how financial transactions are
executed.
Traditional financial transactions are done
in the way that a trade is agreed today and
a settlement is done a few days later, so both
parties doing the transaction have to provide
margin or collateral to guarantee that the trade
will be completed on settlement date.
In the crypto world the trading is done
instantaneously and simultaneously with the
transfer of the buyer’s cash to the seller and
the seller’s coin or token to the buyer. This
has the potential to completely transform how
the financial services industry interacts withfunctionality, price improvement, liquidity,
security and regulatory compliance.How far along are you?
We are in the process of being launched. We’ve
identified our technology platform partners and
we’re in the near final stages of wrapping up all
the agreements and doing the testing with them
to go live. We’re expecting to go live by the end
of third-quarter 2018.Why should people favour your exchange over
others in the marketplace?
I come from a traditional financial services
background, and because of this, we are putting
very high emphasis on making sure we combine
with anti-money laundering and know-your-
client procedures so that we keep bad actors
from off the platform from day one. We want
the exchange to be as safe from that perspective
as we can.
The second thing we’re doing is working with
a number of major global liquidity providers to
ensure that the bid-offer spreads that we show
on our exchange are very competitive with
any other exchange out there. The difference
between the price you buy or sell at on many
markets will be greater than the commission
they charge. We will offer clients true value by
bringing down the total cost of trading.
Then the final thing is that we’re deploying a
combination of hot and cold wallets to protect
our client assets from any hackers. There have
been numerous attacks on exchanges that don’t
keep their client assets segregated into cold
wallets until they want to trade. The safest way
to protect against hacking in the crypto world is
to have your coins and tokens in what you call a
cold wallet, which means they’re not immediately
connected to the internet.
Longer term we are looking for a custodian
service where clients can have their assets
held by a third-party custodian who effectively
guarantees to protect the client funds. This is
very common in the traditional world, but is still
a work in progress in the crypto world.
We’re really trying to make the exchange as
safe as possible and as accessible to the ordinary
person as possible. The total cost of trading
should be lower than other platforms too, so it’s
a safer and better-value proposition.How does this tie in with what you have done in
the past?
The link between what I’ve done working with
Chi-X in the past, is that I’ve launched regulated
financial markets in over twenty countries
between Europe, Canada, US, Australia,
Singapore and Japan.
Chi-X combined modern technology with a
service focus to deliver significant improvement
in the trading environment. Investors saved
millions through lower costs and better
processes, new ways of trading, new markets
and new participants. In four years it became the
biggest share trading vehicle in Europe. Now,
I’m hoping to do the same in the digital asset
marketplace with Kryptos-X.
I don’t think there is anybody else out thereYI28_pp26-29 CRYPTO STUFF _v5 NB.indd 27 09/06/2018 00:04