This article originally appeared in Crypto AM
AAX, the first digital asset exchange to be powered by LSEG Technology, and the first exchange to be a member of London Stock Exchange Group’s Partner Platform, is on a mission to connect crypto to global finance.
From discussions over a forum and silent experimentation, Bitcoin and with it an entire industry has come a long way from where it was only a decade ago.
We founded AAX in early 2018, right after Bitcoin had hit its all time high, when the so-called crypto winter set in. For us it was clear that the next phase in the life cycle of this newly emerged asset class was to be its integration with the wider economy and the regulated investment space.
While building, a new generation of institutional-grade exchanges began to appear, such as the likes of Bakkt and ErisX. Crypto derivatives markets started to heat up and gain traction. Commentaries and guidelines on crypto assets were published by bodies such as the International Monetary Fund (IMF) and Financial Action Task Force (FATF), as well as domestic regulators everywhere. We also learned of Facebook’s proposed Libra and a growing urgency among Central Banks to investigate Central Bank Digital Currencies (CBDCs). At the same time, we’ve seen high profile custody providers, like Fidelity Digital Assets Services as well as a wide range of fiat-to-crypto gateway solutions enter the space.
At the core, we see the development of this infrastructure as a quest for trust. AAX was built with the same goal in mind.
Offering OTC, spot and crypto derivatives markets, AAX offers a trusted trading environment which stands up to regulatory scrutiny, and can accommodate institutional investors, while providing a user friendly and aesthetically pleasing experience that appeals to retail traders. Six months after launch, we have over 100,000 registered users and in process with a dozen mid-sized funds and high volume traders.
At the heart of our exchange, we’ve deployed LSEG Technology’s proven matching engine, Millennium Exchange – the same technology that powers London Stock Exchange and a host of other capital markets. This enables us to offer a low latency trading environment, capable of handling institutional order volumes with ultra-high frequencies. We also plan to establish a FIX gateway, in addition to our API Websocket, to be able to provide direct market access to corporate clients.
For security, we’ve partnered with Kroll, a global leader in cybersecurity that has advised financial institutions, governments as well as intelligence agencies. We operate a multi-tiered CCSS-compliant security system, with no single point of failure. And for high profile clients, upon request, we are able to offer custody with regulated entities.
Integrity is likewise central to our philosophy. For this space to progress, we need to be able to operate fair markets, where prices are accurate. To that effect we’ve partnered with Solidus Labs for expert market surveillance to detect and combat market manipulation. We also handle client onboarding diligently and work with Refinitiv to help ensure no known bad actors, or sanctioned individuals can participate in our markets and contaminate our liquidity pools.
In addition to USDT settled perpetual contracts for Bitcoin and Ethereum, which can be traded with high leverage, we’re developing a suite of products around lending, staking, indices, and options, while we are always on the lookout for innovative digital asset projects around stablecoins, commodity tokens and security tokens that facilitate the interlinkage between the crypto space and global finance.
Especially now, as the macroeconomic environment has begun to crack in its core and a potential depression may loom, interest in Bitcoin and the space at large has been on the increase – particularly now, right after the Halving. But if this is indeed a possible turnaround moment for the industry, with more institutional and mainstream participation ahead, then it means that exchanges also need to up their game and raise their operational standards.
This is what we’ve set out to do with AAX, and as we continue to expand our services and develop innovative financial instruments and deeply liquid markets, we do invite all who wish to unlock the potential of digital assets and trade on a world-class exchange to learn more about our platform at aax.com
About the author
Michael Wong brings 19 years of experience in systems architecture, financial platforms, and blockchain technology. As AAX’s Chief Operating Officer, he is responsible for shaping AAX’s technology strategy, partnerships, and architecture – and ensuring all operations are aligned with AAX’s core principles. He held various roles at IBM, including as Blockchain Business Development Lead, and he was also Global Director of Engineering at City of London-based financial markets technology provider, Integration Systems – specializing in low-latency engineering.