Phemex, founded in 2019 in Singapore, operates as a cryptocurrency derivatives exchange. The platform has risen to the top 10 global exchanges in less than two years with a top daily trading volume of over $ 12 billion. Cointelegraph spoke with Jack Tao, founder and CEO of Phemex, about the challenges and risks of running a cryptocurrency exchange and where he plans to use Phemex next time.
Tell us about the history of the stock market and what it was like to launch a trading platform during the crypto winter?
Phemex’s story is to find solutions to many of the problems I have encountered in traditional finance. When I first discovered cryptocurrency, I was very excited because it seemed like a way that would allow me to eliminate the shortcomings of traditional finance.
One of the technological solutions is especially blockchain. Because it offers so many features, my first motivation was to try it out and learn more. This made me set up some modest mining operations and experiment with many exchanges and trading platforms.
My first cryptocurrency venture ended in heavy losses. Despite the huge promise offered by cryptocurrencies, I realized that this sector still has a long way to go. The exchange I used at the time had many technical problems that led to frequent crashes and hacks. There were no standards and there was little trust. To fix this, I tried to come up with a solution by combining my financial and technological knowledge from Wall Street.
The end result is Phemex, a powerful and effective platform that, despite its partial Wall Street origins, is dedicated to helping everyone, not just a select few, achieve financial independence. Phemex is good at using traditional financing standards and tools while remaining true to the cryptocurrency values of financial freedom and self-affirmation.
How does Morgan Stanley’s 10 years of experience help you run your business?
Prior to founding Phemex, she was Morgan Stanley’s Vice President of Global Development for Standardized Ecommerce Execution Strategies (MSET) (BXS). My experience in finance gave me the necessary skills and ideas to launch Phemex.
With over a decade of experience building algorithmic trading platforms with high throughput, low latency and scalability, I was able to identify the fundamental challenges facing the TradeFi sector. Since I was able to identify the problems, all I had to do was find solutions, which was to make Phemex one of the most reliable crypto and derivative platforms.
I am proud to say that Phemex has grown exponentially since its launch, and we now offer many spot crypto markets and derivative contracts with up to 100x influence. We have risen to the top 10 global exchanges in less than two years, with a maximum daily trading volume of over $ 12 billion.
What are the most difficult aspects of running a cryptocurrency exchange? Does the page play a role in this?
Managing a cryptocurrency exchange is not an easy task. Key concerns include security and protection to ensure we offer the most reliable and secure platform for our users. The security of the system and user accounts is one of our top priorities, and we have designed and implemented a specific hierarchical cold wallet system where each user is assigned a separate cold wallet deposit address.
All Phemex deposits are collected on a regular basis in the company’s multi-purpose cold wallet using an offline signature. Based on our best practices on risk management on Wall Street, we are able to detect all malicious activity and act quickly to protect users’ assets and the platform. Qualified withdrawal requests are also processed with an offline signature, so that all assets are stored 100% in the cold wallet system and all transactions are done offline.
When it comes to location, choosing a place to run a cryptocurrency exchange is not much different from choosing a place to run a regular business. The considerations are actually quite simple: you need a good business environment and supportive guidelines, a growing economy, a city or group of innovative and entrepreneurial talents, and other business-friendly compliance rules and structures.
Singapore is one of the places that meets these criteria. Singapore has become an important hub for cryptocurrency in Southeast Asia.