Andy Cheung previously held the position of Chief Operating Officer of OKex, one of the well-known global crypto exchanges, before he launched his own crypto derivatives exchange ACDX (Advanced Cryptocurrency Derivatives Exchange) in August of 2020. UNLOCK interviewed Andy to talk about ACDX and his plans for it. This month, (November) ACDX is launching their ACXT Token on their platform to raise part of the 40 million USD they need for investments. The will launch the token with more utilities to be introduced after in addition to new crypto structured product.
Like everyone UNLOCK first asked the reasons for leaving Okex and launching ASDX and the expectations. As Cheung states, I really enjoyed my time at OKEx. We had a lot of talented people, a great working culture, and extraordinary leaders. Personally, I think OKEx is the best crypto exchange in the world. But everyone has their own passion, and mine is to start my own business. I am an early adopter. A decade ago I was excited about how e-commerce can make our lives easier and started my life at Groupon. A few years later, I was amazed by what digital marketing can do and change our behaviors, joining iClick and see what influence it will bring to Asia. Then I was obsessed with blockchain technology and cryptocurrency, and I am grateful to have begun the adventure of building a cryptocurrency exchange with a few OKEx co-founders. I was not intentionally riding the trend, but I guess I was lucky that every one of my decisions was right so far. Now, I can see that a new big trend is coming in crypto industry, and it is derivatives.”
Cheung believes it is a big market with high potential and everyone is optimistic about crypto after the DeFi boom. He believes, “The crypto market is not a big concern for us as derivative can help investors to hedge risks. In addition we have a strong team with professional background (from Merrill Lynch, Lehman Brothers, Standard Chartered), we’re going to bring in more institutional investors from the traditional side.” ACDX hopes to take 1-2% of the market share. As he explains, “If we look at the crypto derivatives market in 2019, the average daily trading volume is USD 8.5 billion. And 1% of the volume is USD 85 million.”
Most institutional investors require a strongly regulated exchange so UNLOCK asked Cheung about this. His reply, “Looking ahead, we will embrace regulatory guidelines and rules globally, as institutional and retail investors have been increasing exposure in cryptocurrency investment. Areas like AML, KYC, antifraud, transaction reporting, and cybersecurity are likely in focus. While different jurisdictions are still putting efforts on perfecting their regulatory framework, ACDX will maintain strict KYC compliance and AML program, and set up a market surveillance team to prevent and combat any financial crimes.”
In terms of liquidity for the platform Cheung is not worried as they have quite a number of institutional investors already trading on the platform. When it comes to the raising of 40 million USD he states, “We do not intend to raise the full $40 million in 2020, but in a few rounds.”
As for operations in the MENA region he states, “We are building a global exchange but at the moment our focus is on Asian markets, it will also be crucial for us to focus on specific regions at different stages to better utilize our resources.”
As for the ability of ACDX to compete with already established exchanges, Cheung explains, “ There will be clear rules and guides. Current popular derivatives like perpetual swaps have an always-changing funding rate and are rather complicated in calculation. We want to change that. We will ensure that our innovative products will be easy and also fair to traders of different levels of experience and skills, and at the same time, satisfying their trading needs. In addition, we have the advantage of better exchange infrastructure. We are a next-generation exchange that supports a lot of advanced trading features including multi-asset collateral, smart cross margin, order book trade mode, etc., which other major crypto exchanges cannot provide.”
To date users of ACDX can trade perpetual futures, quarterly futures, and futures spread. DeFi has also been an inspiration and is in the design of the ACXT token with governance features and ACXT liquidity farming.