A CEX in The Face of Regulations, Adoption and Innovation - TOKEN2049 Singapore 2022

hello everyone uh thank you for attending this session I am CEO and co-founder of difx digital Financial Exchange and uh as an H1 Trader since last 15 years I have been dealing in different markets like equities derivatives options my journey in digital assets started from 2016 onwards wherein we were managing uh the prop fund and family offices across Middle East and Southeast Asia starting with a very small amount of five million dollars reaching out to half a billion dollar worth of assets under management with one of the largest custodian in the world and uh while uh doing this uh I was trading on multiple exchanges till 2019 and what I felt there were lots of meticulities which we need to solve back in that time there were not proper regulations and uh just because of that reason we created our own exchange which was digital Financial exchange and initially the plan was just to manage the family offices through the exchange and uh in 2016 uh 2021 June we went uh with the retail adoption as we saw that the institutional grade exchange which has came up it will be very good for the retail audience and finally we went for the retail from 2021 onwards and the real challenge is what we have faced in last one year was the regulations we went with different Regulators currently we have more than seven Regulators who are governing our exchange and I personally feel that the real adoption which needs to come on the digital assets will only come when the regulator understands the real use case and only then it will be possible to have that mass adoption as a cross asset exchange I have seen that we have more than 3 billion users on the traditional side trading on different asset classes but as of now there is a massive gap between the digital assets and the traditional assets we have more than 300 million users but if we need this shift it is the regulator who will play the major role going forward and The Regulators needs to be very innovative going forward if they need real mastered option to come in I think currently there are 25 to 30 countries which have regulated the digital assets but if we go Niche into the regulations we'll see there are hardly two or three Regulators who actually understands that what is needed by the industry and there is a detailed classification I feel which is needed to justify and classify the tokens and the coins uh for any regulator I think there was one very large regulator last month which did a deal wherein a cattle farm in one country went as a security in the trustee company with that regulator and they came out with a security token which was distributed to more than 15 000 users across the globe so these are the regulations if you need real Mass adoption I think The Regulators needs to understand the need of our and only then it is possible that we will have that billion users in coming three years who are trading on the centralized exchanges if we see the overall growth in last one year we see Latin America we see Middle East Asia Pacific and Southeast Asia we have more than 100 million users who came only from these regions but ultimately they came through a different concept because of the mass adoption on the web 3 space which was a decentralized protocol by doing different concepts of play to earn walk to earn and so on but ultimately these people who came in they need and proper on-ramp and off-ramp system to in cash their funds back in their bank account and I think the current system and the regulations only allowed in 20 or 30 countries wherein these users can have their funds whatever they are earning through different web 3 Concepts to be given in their bank accounts and there are n number of countries wherein when you get the funds back in the system in your bank account your funds get blocked so this is what we feel as an exchange that it is very important to understand the need of R why these Mass adoption will come in and who will be the people who will be trading on digital assets through web3 space and the adoptions of nfts because of the growth they have seen as a hedge fund Trader I have seen that in last seven years the digital space has outgrown and shown a phenomenal returns if you compare with each and every asset class on the traditional side the digital assets have shown the growth over the period of last five seven years and it has outperformed each and every asset class even if we do the comparison in last one year we're in each and every Market is down and if we compare that digital space compared to the Fortune 500 companies even still we are about these trend lines of the very large companies listed on NASDAQ and lse and that's where we feel that the asset class has grown but the adoption through institutions adoption through the family offices where the larger chunk of funds flow in the traditional side if that needs to come it will only come through a proper regulations to go on the regulations as in exchange why we feel that these regulations are needed and what Solutions we have given we are across asset exchange wherein we allow users to trade more than 1000 assets traditional with their crypto assets on their custody we are managed through one of the largest custodian when I was trading on more than 25 exchanges back from 2017 to 2019 my real problem was switching between the assets ease of trading on these platforms wherein if I need to go and see my order book it it will take me at least 10 minutes to go deep dive into the platform and check what's my order book what's my trade size is that's what we feel as an exchange that it is very important to give the solution which is an idiot proof to the users that even a user who didn't had any experience on digital assets can come and on board with you complete its kyc within few minutes and start his trading Journey that's what we feel is the need of our and we are the only exchange right now which has launched a product which is a nomination Tech in this nomination Tech we allow users each and every user of our exchange have an option to nominate their family members and they can nominate up to five family members friends and their relatives and if anything happens to them all the assets what they have on the platform can be transferred to their family members and everything is robust on blockchain so even as an exchange once a user comes in at the back end we cannot change because every transaction is recorded on the smart contract that's what we feel that today if you go to the regulator as an exchange and if you are robust in your kyc compliance and how you are protecting the users that's what the key points are which we are taking care as in uh Exchange if you go in the past history in 2020 there was an article by one of the largest Publishers coin Telegraph which says uh what happened to your Bitcoin when you die and millions of users went and had a poll and 89 percent of the users showed the concerns that we don't know that what will happen to our Bitcoins once we die and they replied it two years later writing that yes there is an exchange wherein a user can have all the funds in the centralized system with one of the largest custodian maintaining with fully insured wallets and all the assets can be transferred to their family members so we personally feel that today if we need to go on that one billion or 2 billion user mark it is very important that the centralized exchanges will play a wider role to have on-ramp and off-ramp system for each and every user who are either working on the nft platforms who are either earning on play to earn Concepts or weapery concepts ultimately they need to come on the centralized system to get that funds back in the system and each and every exchange needs to take care that the users are protected in at least whatever funds they bring in these are secured by the custodians and they have a robust system that's what we have built and in last one year just because very small Integrations of protecting the users we have successfully onboarded half a million users without doing that massive marketing only marketing the real use cases where there were problem faced by me as a Trader in last seven years of my trading Journey with uh different exchanges and what Solutions we have given so even my advice to the space of centralized exchanges is to have a solution you already have millions and millions of users just by integrating small Solutions I think the real adoption of the institutions family offices and the mass user will come in just because it's very important for everyone to have that security when they are dealing the history says that there were lots of hacks happened there were companies who ran away with funds we have seen in last one year that more than 200 billion dollars were washed out just because the compliance systems were not in place so that's what we feel is the need of R for Regulators to streamline the regulations but simultaneously understand that what is the need of R to have that mass adoption thank you