The Evolution of Crypto Exchanges: Insights from OKX’s Chief Commercial Officer Lennix Lai

Introduction:

The cryptocurrency market is known for lightning-fast innovations and high volatility. It demands not only resilience but vision from its infrastrcture providers. Lennix Lai, the Global Chief Commercial Officer at OKX, has evidenced this blend of qualities. Steering commercial strategy at one of the world’s top crypto exchanges, requires divesity and dynamism.

In an exclusive interview, Brave New Coin speaks to Lai, whose daily decisions impact millions of digital wallets around the globe. From discussing the optimization of user experies to exploring the nuances of regulatory compliance, Lai gives us a view of OKX’s commercial strategies and a glimpse into the platform’s future.

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." took place between 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. We are in the midst of what I would describe as a ‘mild’ bear market (although perhaps it is now over because of the ETF-driven price push) but certainly, interest in crypto, crypto trading, and Web3 has waned and been overshadowed by technology like AI. How are exchanges, investors, and traders alike handling current market conditions?

• My personal view is that the Web3 and crypto markets have remained resilient, and the overall trend in the long run is optimistic.

• I don’t think that interest in crypto and Web3 has been overshadowed by other technologies like AI. Instead, I think it has been increasingly incorporated and weaved into the field of Web3. We’ve already seen projects trying to merge both worlds.

• For example, OKX Ventures recently led a USD$1 million funding round for Hong Kong-based start-up Moonbox, which focuses on building applications powered by the latest generative AI technology for use in Web3 and NFT applications.

2. OKX’s daily trading volumes are somewhere in the region of US$2 billion a day! What does it take to be the Global Chief Commercial Officer of a platform of that size?

• Achieving such a milestone requires years of continuous hard work, commitment, and most of all, team effort from our employees across the world. This is also a testament to our company’s strategy of prioritizing and investing in blockchain technologies with a long-term vision.

3. What are the major strategic goals for OKX?

• The overarching strategic goal for OKX is to drive mass adoption. This is not only for OKX itself, but also the whole blockchain community. At the heart of this, there are two key aspects.

• First is user education and user experience. OKX focuses a lot of effort on its users, intending to make our Web3 products and services as accessible, convenient, and intuitive as possible for everyone – from beginners to experts alike.

• The second is infrastructure. To cater to the next billion crypto users, we as a Community, together, need to address a variety of technological challenges including compatibility, security scalability, etc.

• That’s why OKX invests heavily in its Wallet, which currently supports over 70 blockchains and includes some of the most innovative solutions in the field, such as MPC and Account Abstraction technologies.

4. What in your opinion will be the major barriers to the growth of cryptocurrency trading platforms in the coming years?

• I won’t call these barriers, but areas we’ll need to manage carefully in order to facilitate growth as a virtual asset trading platform. They mainly include the constantly evolving regulatory landscape around the world; and threats from security risks and bad actors; and it brings us to the next point, which is general investor trust and confidence.

5.Inversely, what will be the drivers of the growth of cryptocurrency trading platforms in the coming years?

In my opinion, the growth drivers may include the increasing adoption of crypto among both institutions and retail, which can be stimulated by approvals of Bitcoin ETFs and diversification of digital assets such as the tokenization of real-world assets; as well as clear, open, and consistent regulations towards the sector.

6. Are there any new products or services in the pipeline for OKX that users can particularly look forward to?

Currently, we’re only scratching the surface of Web3, and OKX has been working on a lot of exciting, interesting projects to unleash the potential of blockchain technology, potentially with a number of influential, respected partners in the ecosystem as well. Also, we’ll continue to introduce new features, applications, and enhancements to the OKX Wallet, which is an important gateway for our users to explore the Web3 universe.

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

• The new VATP regime of Hong Kong has presented a clear, consistent, and open attitude towards virtual assets and Web3, providing a robust and stable environment for global digital asset platforms like OKX to explore or increase their investment in the city. We expect that this will attract more retail and institutional investors to the space, creating a positive impact on the growth and development of the overall Web3 and even fintech industry.

• Also, with this new regime, virtual asset trading platforms are opening up conversations with traditional industries, including banking and traditional finance, to explore potential opportunities and growth together.

• OKX Hong Kong has invested heavily in talent acquisition, innovation, technology, compliance, and system security.

8. The industry has in 2023, dealt with a wave of cybersecurity threats and bad actors. In Hong Kong 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?

• OKX has led the industry in adopting and setting standards globally which are very important to enhance transparency and build trust.

• One of the initiatives that we’re particularly proud of is our Proof of Reserves (PoR). Marking its one-year anniversary last month (October), our monthly PoR process publicly discloses OKX’s assets in real-time and allows users and the general public to verify that we always have sufficient assets to meet all withdrawals using trustless, open-source tools powered by blockchain technology.

OKX’s latest proof-of-reserves report can be found here https://www.okx.com/proof-of-reserves

• Another recommendation is to enhance the use of blockchain RegTech tools, which can be effective in helping monitor, identify, and investigate virtual asset transaction risks and even financial crimes.