This section aims to give the opportunity to introduce some of the best 🇪🇺 founders. Most people loves their products but don’t know who are the founders behind them. Hello World.
Archax (Regulated digital securities exchange)
Hi Graham, you recently launched Archax; can you share a bit about your background?
I have close to 20 years’ experience in financial services including Chief Operating Officer, Chief Compliance Officer and other finance roles at companies such as HSBC, Caliburn Capital, Leo Fund Managers and Coutts Bank. It was when working as COO/CCO at Omni Partners, a $1.4 billion hedge fund based in London, that I began looking into the crypto space.
How did you get into the bitcoin and blockchain industry?
I began taking a personal interest in the cryptocurrency and blockchain industry in 2013 while working at Omni Partners. Then in 2017 I began working on setting up a truly institutional cryptocurrency fund; however, it quickly became clear that the crypto industry was not set up for institutional players. This led to myself, along with two colleagues, leaving the hedge fund to start Archax.
Tell us a bit more who is behind Archax. How big is your team? Are you hiring?
Archax has been running for just over a year now. We have built the team to 11 and are recruiting. At the moment, our main focus is recruiting to grow our tech and regulatory teams as these are our main areas of focus currently.
What is the vision of Archax? How are you bridging the gap between the crypto and traditional investment spaces?
The vision for Archax is to be the first regulated digital securities exchange in London, providing the most secure and transparent venue for institutional clients. We are bridging the gap by bringing this new blockchain technology to the traditional finance world, making processes quicker, more cost effective and facilitating liquidity in current illiquid and hard to trade assets.
Can you talk more about the technology behind your exchange?
We have technology partnerships with Aquis Exchange and Quod Financial, who are leading suppliers to the traditional financial markets space.
This gives us proven technology that is familiar to institutional players and integrated into their existing workflows. Around this we are developing our own IP in a front end and digital securities platform, integrating the blockchains needed to handle the digital security tokens that we will list.
What’s your business model?
Firstly, although based in London, we are building a truly global, 24x7 market, which will list global issuances and have trading participants from all over the word.
We charge listing and annual management fees for the tokens that we list and then use a maker/taker model for trading fees. Alongside this, we offer a regulated institutional custody service which is another source of revenue. In the future we see additional revenue coming from activities like primary issuance, brokerage services, market data and derivatives trading.
Who is your target audience?
Out target audience and direct clients will be professional investors and institutions. There will be retail flow on our exchange, but this will come through an intermediary like a broker.
Can you share a bit more information on your traction, whether it be clients or partnerships?
As we are pre-launch, our traction at the moment is in the form of partnerships and pre-listing agreements. We already have partnerships in place with 18 firms — including many of the leading players in the emerging tokenisation space. Partnerships with companies such as SPiCE VC and Securitize have been helpful as we continue our fundraising.
We are in dialogue with around 50 firms about pre-listings and are putting in place agreements so that they can be on our exchange and we can be generating revenues at launch.
Any recent news in your industry you want to highlight?
Over the last few months, we have seen European regulators pave the way for the industry. There have been multiple STOs that have taken place under various European regulators to great success and we look forward to enabling institutional adoption of this technology around the world.
What are you thoughts on the crypto European ecosystem?
Like mentioned above, Europe is leading the way in terms of crypto and digital securities. Many regulators throughout Europe see that this is the future of finance and are supportive in helping European countries be at the forefront of this emerging space.
Anything you read recently that you think is very interesting?
Mark Carney, Governor of the Bank of England, highlighted the opportunities in place within the UK now for the FinTech industry. Given the uncertainties of Brexit and the nascent nature of the digital asset space, it is interesting to see that London remains committed to being a financial centre and FinTech hub of the world. In his words:
“By adapting our hard and soft infrastructure, the Bank of England will help create the conditions for such innovation to flourish to promote the good of all the people of the United Kingdom.”
Anything to add?
A lot of conversations happen around whether there is demand for security tokens. We’ve seen around 160 tokenisers appear in this market. Traditional exchanges such as LSE, SIX and ASX talk about moving into the space. What is missing at the moment is the market infrastructure to allow these instruments to be readily traded. Once those pieces are in place, we will start to see more liquid securities and traditional players move over in waves. When that happens, the true advantages of this technology will become apparent.