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- [00:00]
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- [00:32]
Hong Fang
We are the first and probably still the only exchange that can offer both retail product as well as wholesale and institutional product that has the derivative elements. Same thing with Australia. We can serve institutional as well as wholesale customers, too. And that's the goal that we're trying to continue to kind of work toward, which is to provide a more holistic and compliant and reliable product to a broader institutional customers. And we are very hopeful of that.
- [01:09]
Host
Let's get back to it. We're going to record a special edition of Markets Daily now, live from Consensus Hong Kong. Our next guest is the President of OkX, Hong Fang. Hello.
- [01:20]
Hong Fang
Hi.
- [01:21]
Host
Well, listen, Andy and I were just talking about being together in New York. The three of us were together in Dubai. And so let's bring the conversation to Hong Kong now. Talk to us about why it's so special for you and OKX to be here at Consensus Hong Kong today.
- [01:38]
Co-Host
Grab a microphone, Hong. Yeah.
- [01:40]
Hong Fang
Thank you for reminding me. We always love Asia. Asia is a traditional strategic market for us. It's a very unique community. We have a strong team here in Hong Kong and we are committed to continue to contribute to the crypto ecosystem here. And it's very exciting to see the venue scene here. It's very lovely.
- [02:05]
Co-Host
I think retail excitement about crypto continues. Right. It's the thing that started as a hobby and has become a giant multi trillion dollar financial market to total flows in November and December were over $10 trillion, which is pretty massive. Crypto loves to trade. It doesn't like to invest so much, which certainly favors an exchange like yourself. How do you see your biggest customer base, your retail customer base? How are they changing their moods or their activities or their behaviors in the last 12 to 18 months?
- [02:40]
Hong Fang
I think that when we look at our crypto community, our customers in different jurisdictions, obviously different regions sometimes show different behavior patterns. Yes, we definitely see a little bit more trading in the Asia community, but I would argue that there are also a strong community that look for a long term investment opportunity in, in, in Asia, within the retail side of the spectrum when they would look at, you know, things like Bitcoin, Etherium and other layer ones for longer term, you know, hold. And there are also healthy interest in yield, in yield related products either on chain or, you know, in a different format. So I think that is actually always happening in the background. Probably not as prominent as the trading side of the industry, but that's always.
- [03:36]
Co-Host
A theme that's really encouraging to hear because these people who are trading in their twenties, ten years later they'll be in their thirties, they might have little ones at home and they have to kind of change their behaviors a little bit. Right. So maybe they adopt a longer glide path. Right. A longer investment horizon.
- [03:52]
Hong Fang
Absolutely. And then I think the other thing that we have noticed, particularly in the last 12 months with our product offering, is that alongside centralized exchange product offering that we do offer to our communities in particularly regulated environments, there are also increasing interest in Web3 wallet offering that we have. We have a very strong self custody wallet that has a whole list of things that is acceptable to our customers in one app. And we see a huge momentum of adoption in our community for that particular sector.
- [04:34]
Host
There's actually more people using the self custody wallet than the centralized exchange, isn't that right?
- [04:39]
Hong Fang
Well, if you look at the assets accumulated on both sides, self custody wallet, yes.
- [04:45]
Host
What does that tell? Does that surprise you?
- [04:47]
Hong Fang
It does. We were not expecting that explicitly, I would say, you know, 12 months earlier. But I think what we have been doing internally is really to continue to invest in product, invest in our infrastructure, either on CEFI side or DEFI side. And we really let the market take us on the other side. We also have been investing very heavily in community, either local community in regulated markets, in local community events, or in vertical community online communities in different protocols. We invest a lot of time in getting real customer feedback from them and take that back and then really work on our product iteration. I think that efforts really pay off.
- [05:35]
Host
You know, when we talk about community, we don't often hear exchanges talking about community. We hear the Web three gaming projects talking about community. We think about Telegram and Discord and I think the community you're talking about maybe touches a broader audience and you reach them in a little bit of a different way. When you talk about community, what does that mean and how do you reach them? How do you foster this OkX community across markets?
- [05:58]
Hong Fang
It's really why we are here as an exchange. We are not here to just provide product we are here to actually offer value to our customers and that's the only sole reason for us to be, to be around, to have a reason to exist, so to speak. So when we look at our customers we make a big point in making sure that we actually can reach the customers in a local way. That's why over the last year we have been making a lot of progress on the CEFI side in getting licenses in Singapore, in Australia, most recently in EA. We are passporting to 28 countries in EA. That's the very first step for us to be able to give them local, on ramp, local, you know, KYC experience and local compliant products which is really important for them because they need sustainable and reliable and local platform to, to, to hold accountable when it comes to Web3 wallet. Right now there is a lot of crypto native community who are looking at different chains, different access to assets that are not immediately available on cefi. I think that's a big drive and being able to understand what they're looking for and making sure that we have the technology tool to pull the liquidity together and make it available to them and help them do what they want in a, in a good way. I think that's, you know, our mission and hopefully that answer your question, but it's really about customer needs and that's all we try to build our efforts around in terms of product infrastructure and as well as the other organizational infrastructure that we build.
- [07:46]
Co-Host
It feels like a customer can spend more and more of their time just in their wallet and on the exchange and just experiencing more and more products. That's going to provide a lot of interesting flows that institutions might care about and liquidity. So talk about how you can expand out of retail into institutional coverage, especially since institutional services are limited, especially with lending and things like that. How can you broaden your client base into the hedge fund and professional investor world?
- [08:18]
Hong Fang
Yeah, so indeed I think the institutional play has always been there. Our customer segment has always been including institutional players around the globe, in Asia, in Europe, in Latin America. So that's always there. I think we have been taking pride in our institutional grade products that we have been able to offer to them in terms of both product innovation as well as liquidity, global liquidity that we offer to them. One important thing that we will continue to invest in over the next 12 to 24 months is based on our current CEFI infrastructure where we have licenses in Dubai, we have licenses in Australia, we have now access to 28 EA countries. I think there are a lot of institutional Players in those jurisdictions who are not only looking for the traditional offshore products for, for them to access to, but also regulated compliant crypto products that we can offer. And I think that we have a particular competitive advantage at this point in being able to serve those customers. You know, in, in Dubai, we are the first and probably still the only exchange that can offer both retailers product as well as wholesale and institutional product that has the derivative elements. Same thing with Australia. We can serve institutional as well as wholesale customers too. And that's the goal that we're trying to continue to kind of work toward, which is to provide a more holistic and compliant and reliable product to a broader institutional customers. And we are very hopeful of that.
- [10:12]
Co-Host
You mentioned derivatives are perps going to just take over the world. They are this fun but also really efficient, really powerful kind of construction that folks use. And then of course your options listing too. How do you keep people educated? How do you keep people using those products in healthy ways since they certainly have the capacity to do so?
- [10:34]
Hong Fang
Absolutely. I think for our regulated platforms it's a very important thing that we do is to have a proper process in place to verify who the customers are and make sure that they are those who can access those products in a compliant way. And in markets where there is no license requirements, we try to work with our partners to provide proper education for them and help them do their own due diligence and protect them. From our perspective, we want our customers to be responsible in trading to protect themselves because we want them to be able to have a long term benefit from what they do with us. We're not here for short term, we're not here for short term profit. We're not trading against them to get money from them. We don't want them to blow up, you know, in, in a, in a crazy moment. So I think that that's an ongoing efforts that we have to continue to invest in to help our customers trade responsibly. That's one key message that I think we try to convey both within our own platform as well as when we partner with our, you know, local partners. We try to work through them to delay that message to, to deliver that message.
- [11:52]
Host
A common theme in this conversation is OKEx's global expansion. Can you tell us about where you're looking at next?
- [11:59]
Hong Fang
We have quite a few markets that we continue to work on. Obviously, you know, we have been working on US market for, for hopefully to be able to complete the rebrand in that market into OPX this year. Obviously, you know, ea, we just got the passporting. But that's just the starting point of extremely long journey of hard work. As you know, Europe is very complicated. It's now one regulatory regime but it has, you know, 28 countries. So there definitely a lot of subtleties and localization we have to do so and obviously we have, you know, launched in quite a few markets last year. Then the coming focus is really to continue to iterate product in those local markets. We recently added local currency in our Singapore market for for our Singaporean customers. Same thing for Australia, same thing for Dubai. We are adding trading bots in Australia as well in a very compliant way. So we continue to add those more sophisticated products. So I think what we hope is that we can bring sophistication and global liquidity to local markets in a local and compliant way with the local team. That's our hope for cefi.
- [13:20]
Host
And before we wrap up, what are you most excited about for consensus? Are you going to go to the horse races?
- [13:26]
Hong Fang
We'll see if I can survive the whole day today. I look forward to it.
- [13:32]
Host
Yeah, we, we all have a very busy day, but there will be many people at Happy Valley tonight betting on some horses and having a lot of fun. Hong, thank you so much for joining Markets Daily today. That was OKX President Hong Feng. Now, if you are just tuning in, we are coming to you live from Hong Kong where CoinDesk's consensus is underway. We will be with you all day, bringing you conversations with speakers, attendees and the best of our stages.