CEX.IO, a multi-functional cryptocurrency exchange, has been expanding its footprint in the United States, with the firm taking a particular interest in the institutional segment of the cryptocurrency sector. As Finance Magnates reported, the exchange recently secured Money Transmitter Licenses (MTLs) in nine states, Iowa, Kansas, New Mexico, Oklahoma, South Dakota, West Virginia, Maryland, Alaska, and New Hampshire. This complements its money service business (MSB) status, which it was granted by the Financial Crimes Enforcement Network (FinCEN) back in 2015.
CEX.IO secures Alexander Kravets as US CEO
More recently, through a partnership with XTRD.io, CEX.IO now has a Chief Executive Officer (CEO) for its operations in the US, which were officially launched on Independence Day on July 4. XTRD.io offers institutional trading products for the cryptocurrency space. The partnership will see CEX.IO focus more on the institutional space in the US. To find out about this and more, we spoke with Alexander Kravets, the US CEO of CEX.IO. When asked what his priorities were for the exchange’s institutional arm in the US, he had this to say: “We believe that the next wave of trading in cryptocurrency markets will be driven by retail participation in concert with institutional involvement." “Correspondingly, our priorities for the institutional arm of CEX.IO is to enable hardware connectivity, matching engine upgrades that are in line with institutional demand, and Liquidity aggregation to deepen the exchange book." “We will leverage CEX.IO’s status as a regulated, experienced player in the digital asset trading space in order to acquire targeted institutional lines of business that can interact with existing retail liquidity on the CEX.IO exchange.”
CEX.IO to launch Single Point Access (SPA)
One of the first missions of the institutional unit is to launch its SPA (Single Point Access). This allows clients to trade across multiple crypto exchanges from a single account at a single exchange. This means customers don’t need to open multiple accounts to trade on various exchanges. As such, this reduces counterparty risk. According to Kravets, it also makes order routing and market data seamless with a consolidated order book representing multiple liquidity points. In addition to launching new products, the collaboration between the two crypto firms aims to produce an ecosystem of products for the crypto space - so we asked what he expects this ecosystem to look like. “We envision this ecosystem of products to evolve naturally, with mutual development and integration efforts allowing for a followup suite of products leveraging the XTRD token." “These can range from institutional market data solutions such as aggregated data feeds and market indices to liquidity pools, integrated trading platforms for manual order entry, and products catering to high frequency traders such as colocation services and fast execution capability. The ecosystem is the implementation of joint products deriving from a collaborative synergistic effort of CEX.IO and XTRD.”
Is there potential in the US?
The United States is a large country, and while some states have been very welcoming of Cryptocurrencies , the same can’t be said for all. Not only that but in terms of regulation, the pace has been slow, and businesses have, therefore, been attracted to other markets. Overall, the US wants to create a positive environment for innovation. However, the priority is definitely on making sure investors are protected. As a result, many crypto-focused businesses are either withdrawing from the country or launching separate platforms. “We think the US market has huge potential, especially for regulated players. We’ve seen many successful exchanges limit their operations here due to increased regulatory concerns. The “make hay while the sun shines” mode of operation can be lucrative but is inherently transient. This is why CEX.IO has taken the long view of registering as an MSB since 2015 and obtained licensing and regulatory approval in over 30 US states. “While current retail interest ebbs and flows with the price of Bitcoin, the groundswell of demand for fair, regulated, and orderly markets has been building for some time. We envision significant demand in both spot and derivative markets as digital asset markets mature…”
Facebook’s Libra is a sign of crypto’s strength
Facebook’s stable coin Libra has been dominating the cryptocurrency space, particularly within the US, as lawmakers and regulators try to understand the scope and potential consequences of the project. Aside from the fact that the Libra has the potential to become the world’s global currency, it also has the ability to completely change the cryptocurrency space in terms of regulations, mass adoption, stability and more. As highlighted by Kravets, the sheer attention that Libra has received is a testament to the fact that digital assets are becoming more recognizable and accepted, especially as a direct competitor to existing worldwide hierarchies and ecosystems. Nonetheless, there are clear concerns about the project that can’t be ignored. Namely, Facebook’s murky history with data privacy and customer protection. This has been the main concern brought up by lawmakers. “We do not believe that Libra will be accepted globally in its original form as described in their White Paper and Libra Reserve policy document. It must become a real cryptocurrency or be classified as a payment token - for example under current FCA (Financial Conduct Authority in the UK) Final Guidance these types of digital assets are classified as E-Money tokens and require an EMI license,” Kravets outlined. “Therefore, Libra will positively impact the industry, in the sense that it is forcing regulators to act to develop these types of rulesets in order to classify assets such as Libra in jurisdictions worldwide." “This in turn will bring digital assets closer to the mainstream by leveraging these newly formed regulated, regimented structures, which is of course a strong catalyst to further worldwide adoption and new use cases.”
