The Amber Ascent: In Conversation with Cryptocurrency Maven, Annabelle Huang

Introduction:

In the dynamic and often chaotic world of cryptocurrency, there are firms that have managed to survive through multiple crypto winters and earn the respect and trust of both institutional and individual investors. The Amber Group is a member of this select club. Founded in 2017, this crypto powerhouse has rapidly diversified its offerings, and found ways to adapt to rocky crypto seas. At the helm of some of these strategic moves is Annabelle Huang, a leading figure in the blockchain realm with a rich experience ranging from traditional finance to decentralized platforms. We sat down with Annabelle to delve deeper into Amber Group’s journey, its vision for the future, and her unique insights into the rapidly evolving crypto landscape.

This interview is part of a series of articles Brave New Coin will be conducting with speakers at Hong Kong Fintech Week.

Hong Kong FinTech Week 2023 (HKFW) is here. The eighth edition of HKFW, themed "Fintech Redefine." will take place from October 30 to November 5. This flagship event lies at the core of global fintech innovations and aims to shape the future of fintech across various dimensions of financial services and beyond.

The Interview

1. What drew you to the blockchain and cryptocurrency industry after having roles in conventional finance?

Having worked in traditional finance with Deutsche Bank and Nomura, I was always intrigued by blockchain technologies and the novel ways they apply concepts like game theory and distributed consensus. What drew me to cryptocurrency was the potential it had to revolutionize our financial system by disrupting long-standing intermediary roles and establishing trust through decentralized networks.

Early on, I joined AirSwap, a decentralized peer-to-peer trading platform built on Ethereum. But at the time, it was still too early for DeFi to gain mass adoption given the underlying tech was still too nascent. Amber Group stood out for its full-service platform bridging centralized and decentralized models. Seeing their vision to be at the forefront of this revolution convinced me making the transition could allow me to apply my skills toward building out pioneering offerings. Ultimately, the transformative promise of this new asset class was too compelling to not be a part of its advancement.

2. Amber Group started primarily as a cryptocurrency trading company. Can you walk us through its evolution to the diverse suite of services it offers today?

Amber Group embarked on its journey in 2017, initially establishing itself as a trading desk catering to institutional clients. This offline desk provided high-touch coverage and a comprehensive range of services such as trading, hedging, structured products, fixed-income products, treasury, and asset management. It allowed us to meet the specific needs of our institutional clientele effectively.

As the crypto market grew, we recognized an opportunity to better serve the diverse needs emerging across different investor profiles. So we digitized and platformed our services with WhaleFin, an all-in-one mobile application that enables users to access crypto investments and capture long-term value, prioritizing convenience and accessibility.

To further our commitment to the industry’s growth and innovation, we initiated fund and research projects, investing in early-stage projects and incubating new technologies within the crypto landscape. This demonstrates our dedication to fostering the development of the Web3 ecosystem.

Today, Amber Group boasts a diverse suite of services that cater to a broad range of user needs. We offer premium digital wealth management services tailored to high-net-worth investors, asset management services, and advisory, liquidity, and investment research. By combining different combinations of our products, we are able to deliver targeted and relevant solutions to users with varying requirements.

The evolution of Amber Group from a cryptocurrency trading company to a comprehensive service provider is a testament to our commitment to innovation, adaptability, and meeting the evolving demands of the crypto space. We continue to expand our offerings and refine our products to ensure that we deliver exceptional value and support to our clients.

3. How do you envision blockchain and crypto-related services empowering women and other underrepresented groups in finance?

Blockchain and cryptocurrencies have huge potential to empower women and underrepresented groups through greater access, control, and opportunities. Their inherent nature of being neutral and decentralized holds a lot of promise for what it can do for communities, whether it is for women or for any marginalized groups.

For many women worldwide who lack basic banking services, crypto may provide a gateway to storing and moving value that is not contingent on gender, income, or location. This financial inclusion could help over a billion women globally gain greater security and independence.

Beyond access, crypto also enables new models of getting paid directly and managing finances without third-party control. We’re already seeing inspiring examples of how this empowers groups such as Afghan girls to take ownership of their earnings.

Looking ahead, the rapid pace of innovation in crypto opens limitless possibilities. As an industry leader, Amber Group is well-positioned to help shape development with an eye toward progress and inclusiveness. We envision partnering with activists and organizations to explore applications tailored for empowering underrepresented communities through education, skills-building, and entrepreneurial opportunities.

4. In the constantly evolving world of crypto, what emerging technologies or trends is Amber Group excited about or looking to integrate into its services?

Staking products. Actually, we have partnered with RockX’s Bedrock platform, an Ethereum liquid staking platform. This collaboration aims to reshape institutional engagement with digital assets and meet demands for compliance and transparency. Bedrock plans to introduce innovative features like Distributed Validator Technology and Permissionless Exit. Moving forward, we aim to evaluate promising new staking solutions that leverage emerging technologies to further our mission. Our priority remains empowering more institutions with accessible, secure products across the blockchain ecosystem.

5. The industry has, in 2023, dealt with a wave of cybersecurity threats and bad actors. In HK, the JPEX scandal has left a recent black mark that is still healing. In your view how can regulators and crypto firms better protect client funds?

Protecting client funds from cyber threats and bad actors is a top priority for regulators and crypto firms alike. The recent issues highlighted areas where improvements can be made.

On the regulatory side, developing clear and comprehensive guidelines for safeguarding assets would establish strong oversight and accountability. Areas like licensure requirements, audit protocols, and emergency response planning could help raise industry standards.

For crypto firms, implementing leading security practices is critical. This includes regular third-party security audits, multisign wallet technologies, mandatory 2FA, whitelisting addresses, insured hot/cold storage split, and educating customers on risk management.

Robust routine security measures such as on-chain monitoring tools and scheduled and regular background checks have to be in place to protect smart contracts after deployment and prevent malicious cyberattack attempts that can be carried out through social engineering or system bugs and patches.

It is imperative, now more than ever, for the community to come together to support and protect each other to ward off these unwarranted threats and attacks to further secure the blockchain.

6. I’ve seen headlines about your early successful investment into Ethereum (ETH). The asset has been on a steady downward trend for the last 6 months. Do you have any perspective on the key factors driving this bearish price activity?

The downward price movement of ETH has primarily been driven by the macro market. ETH is moving in line with major assets like BTC, at times even outperforming due to the update to proof-of-stake (POS) and new staking products coming to the market. The emergence of Layer 2 solutions will also drive ETH network value as the mainnet.

The discussion around the possibility of BTC ETF approval will naturally extend to ETH. After all, ETH is the second largest crypto asset.

7. What implications does the Virtual Asset Trading Platform (VATP) framework have for existing digital asset platforms operating in Hong Kong? Are Amber and other firms gearing up for major changes to be in line with the SFC’s new regime?

The SFC’s new VATP regime will significantly impact digital asset firms in Hong Kong like Amber Group, with an aim to better protect investors through stringent guidelines around licensing, operations, custody, and disclosures.

Existing players must carefully review their business models against this benchmark. Compliance with requirements covering areas such as asset segregation, liquidity, controls, and AML will likely require substantive changes across most operational aspects.

Amber Group has been preparing proactively to meet the VATP’s high standards, recognizing regulatory adherence is critical for maintaining user trust. While changes bring transitional disruptions, the VATP’s prescriptive approach promises long-term benefits by institutionalizing best practices in virtual asset trading.

Overall, the stringent new framework demands upgrades across technology, security, client onboarding, and other compliance functions. It establishes standards that should strengthen protections and confidence in our industry over time.

8. How would you characterize the current state of the digital asset market in Hong Kong?

In my view, Hong Kong’s digital asset market is thriving and solidifying its position as a leading Asian crypto hub. Over the past year, it established comprehensive yet innovation-friendly regulation through guidelines and the new VASP Regime.

Combined with its strengths in capital markets, talent pool, and startup ecosystem, Hong Kong offers an ideal environment for crypto businesses. Leading exchanges and projects have sizable presences there.

As retail access expands and initiatives like CBDC emerge, Hong Kong is well-placed to capture growing regional demand. Its maturing landscape and balanced regulation make it attractive for enterprises seeking opportunities across Greater China.

I have published an op-ed on HK’s digital asset market. You can find it here: https://www.veradiverdict.com/p/hong-kong-as-a-crypto-hub

9. Brave New Coin is New Zealand-based and a large chunk of readership is US-based. I am curious as to your thoughts on what the West misses about crypto in Asia, and what we should be focusing on within the Asian crypto market.

There are a few key things I think the West misses or underappreciates about crypto in Asia:

• Retail adoption rates – Countries like Korea have seen massive grassroots adoption of crypto as both an investment vehicle and payment method. This is a strong indication of crypto’s real-world utility beyond speculation.
• Regulatory collaboration – Despite variations between nations, Asian regulators generally take a more collaborative approach versus antagonistic. This allows the industry to mature more organically through cooperation rather than stifling development.
• Innovation hubs – Cities like Singapore and Hong Kong have emerged as global hubs where East and West come together to advance tech like blockchain. This provides Asia a leg up in exploring silos like DeFi, Web3 and play-to-earn gaming.

Understanding cultural dynamics better also helps when marketing to the growing ranks of Asian retail crypto users. Overall Asia is dominating in driving real-world adoption which will likely influence the next phase of the industry’s development.

10. We are in the midst of what I would describe as a ‘mild’ bear market but certainly, interest in crypto, crypto trading, and Web3 has waned and been overshadowed by asset classes like bonds. How are firms, investors, and traders alike handling current market conditions?

In a Risk-off market, it is hard for risk assets to compete with treasury returns. Investors, however, are still watching the crypto market closely. As more geopolitical uncertainty unravels and economic uncertainty still affects the economic recovery in the US & China, liquidity may return to the crypto market quicker than expected.