Exchanges at the Helm: Driving Crypto from Niche to Mainstream - TOKEN2049 Singapore 2024

hi everyone uh yeah I'm Michael Casey uh some of you may know me from my previous hat that I was wearing I was the coindesk chief content officer and ran consensus for a while as the chairman of that big event uh but thrilled to be here at my very first token 249 absolute Delight to get this very different feel conference um I've done a lot of moderating in my time and I can tell you that there's a little this one just a little bit different can anybody have a sense of what's different about this this particular panel than than the usual uh array you have yeah Round of Applause exactly Round of Applause at consensus we put all of we put a lot of effort into trying to get uh a better more diverse representation on our panels and uh I don't think we ever got this not for something as important as exchanges and often you know the woman is the moderator so I'm really drill to make sure that we to see that we have this diversity but Ben if we get any trouble together you and I have to you know join forces here because was applausing for our Bey yeah exactly all right so anyway enough of that why don't we just get started here guys what I'd like you to do just to uh lay the stage here is to describe your organizations you're all exchanges but like which markets you are you in and you know a sense of your size and and and you know what you what what the essence of your company's all about but Ben take it away yeah so uh I'm the co-founder and CEO of bit we the uh second largest Exchange in the world uh pretty Global all over the place uh also we are licensed in multiple jurisdictions uh yesterday I was here with the Red Bull Racing driver so we're also the proud sponsor of Red Bull Racing hopefully to see them perform this weekend uh so yeah yes D okay uh my name is Vivian Ling I'm the CPO at Bing x b x is a exchange that we provide services to over 10 million users worldwide and this year uh we SP we have the partnership with Chelsea Football Club and Netflix uh and a dolphing and wealth conservation to support uh marine life and we also sponsor several sports activities and UFC UFC fighters um and uh early uh this August we set up a new Department called BX lab which uh uh which will set up for supporting the development of of web 3 project um yeah so yeah I'm really looking forward to this very insightful discussion with all the like female leaders and leaders in our industry great Alicia Gracie hi uh I'm Gracie Chen uh managing director sorry no CEO of bigad because uh when I was uh on token tool last year and the year before managing director so may this year I became became the CEO of biget I was told I was the only uh female CEO among top 10 exchanges so hopefully there are more female leaders like like what we see here on this stage uh in the future in the upcoming few years so biget uh just celebrated our six year anniversary uh a few days ago and we obviously St uh started our journey six years ago uh the day before yesterday we also did a new announcement which is we have surpassed 45 million us globally uh trading volume top four exchange around the world Dr you Sonia hi my name is Sonia sha um from kinw Global yes so um coin w we actually have been around for the last seven years um in certain markets we probably haven't really gained that much reputation um we've only started our Global expansion from 2021 but the exchange itself from the Asia Pacific region since 2017 um in terms of users globally we have more than 50 million users um humbly we're probably top 20 globally and aiming for the top 10 learning from all the industry leaders here and um the goal is to onboard new users to the industry um just like everyone in this industry we need to grow the industry together right so that's CW thank you good stuff all right and last but not least Alicia hi uh everyone Alaya I'm a managing director Nadia CEO at Co coin so it's uh my fifth uh token for uh token 2049 and we just uh hosted our 7ye anniversary uh party in Singapore as well um I think we are um having pretty good progress in compliance side and also in uh product side so stay tuned with us um yeah okay so all of you are well sort of all around the world largely with the the United States um and I I think I think maybe we could start this off I want to get a bit of a picture of where you see the growth um I think it's always interesting for me spent most of my time in the United States coming and seeing where you are there are developing countries that have certain trajectories and developed countries that have it and there are different markets and different different PL like maybe I don't know we'll just throw this out like where where do you see the growth coming from I mean is it going to be the smaller developing countries who are using this Ben or is it uh going to be your your regular kind of you know develop High net worth investor types so if you talk about user on boarding is definitely new developing world uh especially within the past six months we've seen you know I think the topic is really good n to mainstream right so we've seen uh a few big ecosystem really unboarding a lot of users uh mainly like T ecosystem through these little tap to earn games like dogs hamsters is coming up um so if you look at the geography of these users mainly uh uh Africa India uh and then uh CIS region and then probably a little bit of Europe um so I think this whole new trend of on boarding is really from these places one of the reason I I think is because the financial system over there is not yet matured so they can immediately on board onto crypto and you can see that crypto is really empowering these guys and in a way replacing or establishing their um uh you know position as a financial type of role so I think this is something really interesting yeah and so and and Vian like is it in those developing countries something that is really all about payments are people using it for everyday exchanges or is it more of as of an investment uh play or is it mix of both what what's the what's what are the nuances there uh okay I actually we see the similar Trends as what Ben just described for in terms of number of users is is indeed come from those developing countries where uh the monetary like system is a little bit unstable or uh basically their currency is depreciation or what uh those kind of needs they have a real needs in their life to to use or to convert their Fe currency to uh crypto currency but for I think for for exchange um I think first and for foremost a task for us is to operate a business in a very compliant way so that's a key challenges for us just it doesn't really means that when we see there's a huge potential there then we can just jump in we have to work with the compliance with with the regulators and also we need to get to know the the micro structure of the stru of that that market for example um in uh in like uh turkey uh in Turkey when when you handle the feat to uh cryptocurrency they actually they have their own Dynamics very different from what happened in um Korea or in like Singapore right so we have to deal with the subtle difference the Dynamics and the local rules um of the market and of of of the of the regulator that's a key challenges and uh apart from the geographic difference we also see there's a lot of increase coming from the institutional side at least for for being x uh cuz like um after the approval of ET ETF early this year actually we see massive inflow or massive interest inflow from the trade F side uh many institutional client either those like Al aset allocators from like all around the globe they start to think think about whether maybe they should allocate some money to to cryptocurrency specifically to bitcoin and ethereum we see all those um fund influence INF influ as a um like potential for the user base not only from the institution side but also when more and more institution come into this area they will automatically give more confidence to the retail side side and the real is more uh I mean have more interest or have more more confidence in investing something they maybe they do not really understand in the past they start to learn yeah I I'm want to pick up all that institutional stuff in a little bit but let's just like to to run with um the sort of retail play but also this SE this regional thing uh you know Gracie picking up on what Vivian was saying there is something about going gra these smaller markets that requires this Nimble you know variety of approaches and a very as you were saying know a customized almost per per region approach to to the marketplace what does it look like in terms of your organizational strategy here I mean do do is it is it affecting your hiring do you you know uh is it what it seems to me as if there could potentially be inefficiencies in terms of the way that that works yeah so product localization that's one thing uh of course when you are serving Global customers like what we do 45 million users coming from more than 100 countries we do have local teams who are doing you know translation they know the local culture know the local customers local influencers much better but I think other than just language or culture uh difference which is quite obvious a lot more will be on some new us around the product localization uh the OTC market uh what are the tokens that they like to trade in terms of listing for example if we uh compare Europe customers versus Asia customers we realize lots of Agents like MIM coins like social fight gamei well seems that European customers like more deping projects so we do lots of customization and localization on listing on product uh on language and culture so that's uh that's actually one of the things that I've keep on learning since I joined the firm 20 half years ago because at that time we were just a smaller exchange uh starting from East Asia uh but through this globalization Journey that we've been through for the past two years I'm actually very proud that we had those numbers but along the way we're also learning okay um so this institutional institutions are coming kind of story which clearly was a major factor in the the ramping up of bitcoin's price to all-time highs earlier this year the the US ETFs being a major factor um Sonia do you uh is there much institutional trade through coin W and and what what are you seeing in terms of trend um actually we're retail Focus not not really institution but in terms of institution um it's definitely we can see as the industry grow and then the market cap growing bigger as as well as a whole industry and then that predominant contributed this especially this year to the institutional inflows and then we have seen in the last eight months of this year people saying is a bull market I would say the bull market probably starting from yesterday which is the official rate cut starting and then so I I wouldn't say the bull market is really here and then the institutional players are here but there are still a lot of institutional money still yet to be tapped into this industry and then um but we are retail focused but money flows so institutional rate CS institutional then flows to companies and retails so it all I mean liquidity comes back it benefits everyone so I mean even retail focused and then we definitely benefit benefit from the institutional you know recognition of this whole industry yeah and obviously the key factor in this is also been the economic cycle you know we did come out of period micro economy definitely significant uh rate hikes in the United States and therefore around the world as well um it's interesting right now right people are expecting a rate cut in the US maybe we'll see how much further that goes but in some places around the world it's actually they're still hiking or they're still actually keeping them tight so what do what does that mean for you for your business here Alicia do you see uh are you are you anticipating a a ramp up in activity and trading if there are is easier monetary policy in the US and elsewhere um so we actually we now we don't have any uh customers in us um but we got pretty Diversified uh user base in global um so we just got our um license in India so India is now um has the biggest user base for us and uh but for those institutions most of them are from Europe and everywhere in the world um our business now will be more focused on those markets that we are fully complian that uh will help us to make our customer to have like more confidence to trade and uh because the the regul and the compliance is all about to protect the local people right so actually we so we I I travel a lot and I talk to uh regulators and some government officers in different countries I think they are from on traditional area but they're actually pretty open-minded to the crypto thing but uh the now um we surely need decades to to to launch to design and to polish a regular regulation right so maybe we need more time and uh we need more confidence uh for the local government and also the local people so you brought up the topic of compliance and so now we're going to go there and Alicia of course KU has had um some some you know enforcement actions New York Ag and and and a doj case as well where do things stand with that and how has it impacted your business and I want the rest of you not getting off the hook either we need to talk through about like this this compliance uh Trend that we've seen but you know specifically qoin has had specific uh challenge so just tell us a little bit about where that's at and yeah how it's impa I think all the players and all the exchanges here we're trying to um driving like regulation um clarities right so for us it's uh I think it's just uh pushing us uh to speed up our operations and our strategy our plans of the compliance side so before that we put lots of our efforts to expand on our markets and uh to polish our products and to just uh push our developer teams every day but now we have a stronger compliance IL legal team and uh we put compliance and get the and uh get license to our first priority but it it means um it's sometimes it's not only about the numbers of your business right it's about if you're are going to run your business with a longlasting or sustainable way so I think it's a good news and uh since we're here and since we're still doing well and we're going to announce the different uh good news to us in this year so yeah I think it's a good news for us good news in regards to sorry going to announce some news yeah some uh we're going to get more license and yeah okay we look forward to that news um Ben uh compliance is not cheap uh you know if you we are sort of I think entered into this wave and it clearly again the United States had some leadership in this uh impact we've had some very you I was on stage yesterday with with Richard tang and and of course it's a unique situation for a CEO to be uh leading a company with his founder in jail right it's extreme situation so clearly everybody in this industry has had to lift their compliance game out a lot of but it's not it's not cheap and and and I think it it can lead to almost economies of scale protection here so what do it meant for you from the business perspective I mean is does it affect the cycle how fast you can grow you know gives a little bit of a picture of it so complaints not cheap but penalty is more expensive right and uh you also not come with monetary but other consequences so uh I think everyone on the on the seats here lucky that uh at least we were not the first one so we can learn and we had the opportunity to adapt the business a bit um so I I think now pretty much all the exchanges are really ramping up the compliance um I think about a year ago uh at least from B perspective we do uh sanction and all the checks up to a certain dollar amount well from a certain dollar amount like $100 but ever since last year uh I think we've seen what happened with the industry uh is now zero amount basically uh name stream checks uh chair analysis and all these checks so the operation is definitely getting a lot heavier meaning a lot Manpower but again I think a lot automation luckily I was talking to like Chan ellip all these vendors are really bumping up ramping up their capabilities to be able to do aut automations the kyc is becoming kyc name screaming everything is a lot more uh efficient but also expensive yes uh so I think the exchanges are their big biggest Partners but that proves the way and also all the exchanges are getting license here and there and they typically look at your Global program what what a simple question most regulator will ask is how many staff you have in your compliance team um so to have a large compliance team actually is a good positive uh signal to the to regulator yeah right I mean but it is expensive but the other thing that also can be is burdensome for financial inclusion right I mean it's one of the dreams of Bitcoin initially was that um you wouldn't have to have this this identity layer in that process but we really I think as I've seen over the last 10 years of covering this space we've gone from that world to one that is now almost entirely kyc right so I just wonder that you guys are all in the developing world and you've got this like take where there are these younger not necessarily as welldeveloped markets and in many of those places things like identity and kyc are actually a burden to entry so has it impacted you know the capacity to to onboard people um or or have you found efficient ways to continue to grow into those underdeveloped markets and yet at the same time maintain compliance and I'd like all of you to address this so your take on that Vivian okay um from my point of view like in the past maybe the initiative of Bitcoin is like decentralized no government but like over the past 10 years development we we actually see a lot of like Risk um exposed to like followed by the decentralized or like government list kind of activity so nowaday come to a point that because like exchange here we are already very big we have to take a responsibility to protect users asset to protect that nobody going to like uh fall into trouble by like trading with us so we feel this probably around this time it's it's like we have no choice we have no choice because we want to protect their the security of the asset and keep like our operation more transparent we have to give our youth more confidence treating with us so we are good people and how to like how to say we are good people because we do things we are regulated by someone by the government or by the regulator and secondly we are like willing and we are proactively uh trying to make our business like uh in linear of the standard of uh like uh Standard Market practice and for from the financial market so basically first firstly we have no choice we have to do that and secondly this is a necessary step to work a I mean a level up in terms of scale in terms of like how what other business we can do so yeah so um I would say from BX perspective we do closely monitor all the regulatory in uh like uh development around the globe from the regulator perspective and from also other uh exchange perspective and uh we internally treat regulation or compliance as a product it's not as a requirement we treat as a product a product that we have to fine-tune we have to make the user interface user experience as better as possible okay so there is a a somewhat different approach to compliance uh within the I would say somewhat competing world of decentralized exchanges and dexes no no I I actually want to add a bit is is in our industry compliance ml sanction we are revolutionized how it's been done uh imagine you open a bank how long it will take you uh and for us this the name screening and the sanction uh the moment you open account the moment we can tag you because blockchain everything is transparent so the whole sanction am is so much more efficient and if you are coming from a sanction address or a child abuse we can identify within a minute and then that address is blocked Ed is been uh enhanced diligence been sent as Str Str has been filed so this whole industry is also revolutionizing the whole compliance uh way of doing things yeah yeah yeah um is there is there a competition from dexes I suppose is where I want to go with this like the decentralized exchanges you know is is that a meaningful competitor to the to the centralized exchange approach Gracie um Dax I I think they are competitors or they have been competitors since day one uh but if you look at the trading volume the user experience everything on chain data for example is telling you that the Dax trading volume is probably only like 5% of the of comparing with sex with the cisis changes part so there is competition but I wouldn't say it's that meaningful uh and also noticing that it's not like a zero sum game actually for us we acquired a decentralized wallet copy keep and we rebranded it into big wallet and this cyle Dex they they have lots of decentralized Exchange function decentralized wallet decentralized nft Marketplace Etc uh and we have lots of collaboration between the central exchange and the Dex so there is competition uh but there's more collaborations so some example could be like for for myself uh I've been a user uh using decentral using uh centralized exchanges since since many years ago not just spet but many other exchanges and some of our competitor exchanges have been using them all the time about certain tokens I want to buy or that I want to trade they're not available on Central exchanges so I have to go to Dex so Dex is more like a graduate school when you are graduating from your bachelor degree you may want to try something more Prof profound something deeper something more unchain interaction right so as a user uh grows or basically from any user point of view they can be boing both using Central Exchange andex yeah and I think there are a lot of collaborations between the two yeah I mean and it's obviously things like defi it's a place where people can really sort of get their teeth into that on that side of things so we got 10 minutes left here let's just sort of have a look at your crystal balls let's see where CU you know as exchanges with these you know cross-sectional view almost of the different uh sectors and different listings that you have on your exchanges give us a picture of where you things where you you see things going so Sonia you're next in line here what do you see as the big trends uh which which which sectors which toen to by yes which narrative yeah which narrative there you go which it's always a sensitive topic um I mean this year we definitely have SE I think the most sexy topic to this year is AI and blockchain yes of course I'm going to say yes to that good stuff so and then because they both at early St I mean still early stage of the whole technology and then there's so much upsight potential to go through but also at the same time there two industry having the similar problem which is infrastructure structure wise it needs a lot of work done so I would we were talking about this before the panel I would really looking at infrastructure side uh still like blockchain AI combined um because I mean I believe I do believe one day we don't need to do anything ourself with I don't need my PA anymore I don't need my tax accountant anymore I don't need my lawyer anymore I've got to get this AI to do everything for me it's the same way booking tickets it's also the same way trading you know on platform trading you know crypto my AI agency will invest my money from me I wouldn't trust my financial planner but I need to trust my AI agent so I mean that's the vision of it right and then that's whole idea of building this data and competing power and everything decentralized is also one of the safest way to grow the industry as well because uh to avoid the single point failures and everything so I mean personally I am True Believer of AI and blockchain te technology so anything in that space yeah I have a big bag yeah I said very pleas to hear that great to hear uh Alicia yeah any particular perspective here that you see I me obviously you're not going to be able to tell us which coins to buy but which what do you what do you see in terms of uh yeah which coins to buy depends we actually we launched our AI mini tool to help our tra uh our users to to trade like smartly so we we talked about AI it's a all about machine learning right and when you want to improve what you're doing you want to learn from your experience so we got millions billions of datas and we analyzed it and we turn them into some strategies to help up users um to trade like smarts and to pick up some strategy for them like customize like it's a customized strategies right so it will depends on your risk uh references uh risk um uh preferences and uh it would uh also analyze what kind of uh coins you use to buy and what kind of uh coins are more populars uh within people just like you so um like before AI we learned experience from from people and uh maybe from some influencers but uh I mean compared five or 10 years ago it's even easier to get more informations like everywhere about blockchain about how to trade about the the Technologies so you can easily find a mentor around you or maybe online or you can just ask your chbt R that's an interesting line of thinking here I mean are you all uh incorporating and and thinking through what the AI trading bot uh world looks like for you I mean you seen uh your users adopting these tools to trade with Ben yeah our approach is slightly different we don't like to use the name AI because to retail users they don't understand what it means right so we we ask ourselves what are the Mandan part of the trading or the whole user experience interacting with exchange that which this part we can make it a little easier a little automation so one of the key for example one of the things we find is most users when they see a token listed on bit they have no clue what it is and they want the fastest tool to tell them what is this about but they don't want the Wikipedia explanation because nobody have time to read they want a quick breakdown of market cap your analysis who are the founders is it legit is a scam who's buying it uh is uh how many users are on Twitter are talking about it quick summary of that so we are using AI to to give them that so so basically when we look at it is where which hard is mainan and Troublesome for the for the users and how can I help them and that's the way we approach it okay you guys Vivian do you do what do you see AI in you know being integrated into trading activity yeah I think AI is a very broad concept uh when you if you want to break it down it's actually we're talking about CH GPT we talk about large language model those like in inferential models that is particularly capable of dealing with large sum of data uh to read a passage to read a social media and draw the conclusion basically it's very easy to use and very user friendly so we use that we integrate that part into our like newsl uh news outlets and we're used to like popping up the news uh to provide our user the most updated Market summary Market Insight those kind of things just a very add-on service and another type of AI called like machine learning is a very mature technology like I when I was a Trader in uh financial industry I use that model like very often we have like three over 3,000 of factors we input into that dat uh input that data into the model and they will uh tell us like when to uh when to buy when to sell of course it's more complicated than just say when to buy when to sell so in our uh we provide a uh trading tool like trading bot we're trying to help uh our you to populate all those parameters by integrating machine learning technology to that product and some some era because I'm also the head of BX slap this moment so when I think about what to invest next in AI technology AI sector I'm now looking for um l l model implementation in deep learning that will be a transformative uh technology and and um experience to trade quantitative Traders I we want to bring that uh experience to retail Traders and also I'm looking at like how to improve the computational effic efficiency in AI space like a modular AI similar like concept as modular blockchain so all those things um it's like there's so many other like Foundation fundamental Technologies we can work on instead of just say Okay use AI to read a passage for you or use AI just to trade okay so we got three minutes left here like this is I'm I'm here as my first token 249 I I must say I'm feeling a lot of energy this feel this feels a little different from some of the things we've seen in in the United States lately um it it feels like things are in a pretty good mood I'll say that much um what's your what are your takeaways like just to be quick here like cuz we are looking again crystal balls where are things going are we in an Up Cycle right now and is there anything that's a takeaway from 2014 and this is your fifth is it right Ela that you you've been to five I think you told me right yeah um I think I can still uh feel the vibe here because I as I said I trouble a lot right um in Singapore I think I see most most uh Diversified um people com in and uh they're still very excited about the new technologies um like five years ago people are talking about some um some uh public chains and this and that and now it may be like AI or maybe mcoins because like m coins just uh represent uh the vibe of communities right and uh there's always some something new uh new narrative SC um but I think it's I'm very glad I'm still here and feeling such a like a positive five here just quickly guys are we in an up cyle is it is it uh we coming north saying that we should be we could be all buyas because we're in the industry okay my question is like how up are you are you regular up or you super up I think token picked a perfect date like I would say yesterday 18th of September of 2024 should be the official starting dat of this run if you saying you have made money this year waiting for the bigger one that's that's my that's what I'm thinking cuz the whole microeconomic uh situation has been changing will change in the next 12 to 24 months and Industry booming need liquidity okay Gracie I think I'm much calmer not that hyper bullish uh right now I guess two major factors were observing us interest rate cut 50 bips it's decided already but how would that continue from here second one uh the US presidential election who's going to be the next president what are the policies from the president from SEC from SE Etc towards cryptocurrency industry and that will be the next framework and uh Michael you and I both graduated from MIT so when we were speaking about AI I was thinking there might be to I taught at MIT you taught MIT I start harder to get into MIT as a student than it is to go there to teach and so let's be clear yeah but I mean think about what are the measures that actually we did rather than just using AI but also anti- aai for example lots of users are uh their their accounts were hacked by some other uh hackers because of Def fake so how do we use tools to avoid that so these are some topics that I've been thinking as stuff all right that's pretty much what we have time for right now unfortunately wonderful panel thank you to all five of you for putting up with me and cheering all of your insights a round of applause please for these people