LGO Group Non-Technical AMA
With LGO Markets CEO, Hugo Renaudin
As the November Beta release of the LGO Markets exchange platform is approaching, we figured it was the right time to invite LGO’s team members from both Bordeaux and New York City to participate in an AMA with our community.
Following the Technical AMA with LGO Group COO, Ouziel Slama, and CTO, Charles Couillard; Hugo Renaudin, LGO Markets CEO accepted to answer community questions related to LGO Markets.
How many institutional clients are already on board for the launch?
It will be a mix of traditional institutions, crypto institutions, and trusted partners who have been working along LGO’s side since the ICO. We have clients ready to trade on the platform at launch and are finalizing the details. Our focus at the moment is to establish partnerships that will last and help the platform build momentum in the week or months following the soft-launch.
Is the partnership agreement between LGO and Makor still active or the same since the announcement on 17th of November last year?
Makor and Legolas have agreed to make their relationships non-exclusive and both will work to develop future collaborations.
That essentially means that both of us are working with different parties
When are you going to launch? And which tokens???
We are opening a soft launch at the end of November with BTCUSD.
Why not support your own coin at the launch (November)?
A few answers for that:
LGO Markets is a trading platform for institutional investors, which means that we will list markets on which institutional clients can trade. The only “institutional market” there is right now is USD/BTC, because it is deep enough and liquid enough
In order to list ICO tokens in the US — such as the LGO token — a trading platform needs to be registered as a broker-dealer — we are currently applying to this license. BTC is considered as a virtual commodity according to the CFTC, which allows us to list a spot market on BTC without needing a specific license. For the LGO token, if we want to be sure to be compliant, we’ll wait to have a broker-dealer license
Would you be able to provide me info how you guys are attracting customers to your exchange with all the fierce competition
We are in constant contact with interested trading groups, asset managers, banks and fund administrators. Our platform is unique to what is currently being offered in the space and interested parties instantly see the advantages. We want our outreach to be more organic and on a personal level and these established relationships creates trust and shared interest opportunities.
What do you think about security tokens here? Do you plan to open your exchange for this type of new tokens?
We believe security tokens will be a key component of the future of cryptocurrency markets. Tokenization of illiquid assets is something we believe in as it has the potential to considerably reduce many frictions. Given this stance, it will make sense for us to list security tokens eventually but in order to do that in the United States, we need a broker-dealer license. We are currently in the process of applying for one.
How do you see the future of utility tokens? Do you expect LGO to remain a utility token? If yes will LGO be different?
The concept of utility vs security is one that depends on the jurisdiction you’re trading in. For instance, if you’re in the US, the distinction is not the same as in France, then it is in Japan etc. So for the LGO token, that really depends on the jurisdiction. Additionally, most regulators are not set on this question.
On the future of utility tokens: pure utility tokens will of course still exist and thrive in the future (such as BTC, BCH, LTC, ETH to some extent). We believe in the future of security tokens, which require a license to list — and that is why we are applying to a broker-dealer license.
Who are your main competitors?
Competitors can be any platforms offering a listing of digital assets, which is a large universe. However, the consistent feedback we have received from prospects and asset managers is that our offering is differentiated on custody, transparency and regulation (will be regulated from day one). This will be the LGO brand.
It is important to note that we are collaborating with these competitors. It makes sense for several reasons: 1) it will help us grow: being connected is mutually beneficial to enhance cryptocurrency markets liquidity. 2) Crypto trading platforms are in the same boat. There is uncertainty regarding regulations, the future of cryptocurrencies, uses cases, etc.. The market is large enough and growing, we should all collaborate to ensure that we build the best possible markets.
Have you already considered any collaborations? As you are based in the US (as I understood) will you consider a disadvantage for your potential partner to be based elsewhere?
great question — yes we are currently working on some collaborations with other entities to make our business better. We can work with clients from everywhere, as long as they follow our values of fairness, transparency and show the same willingness to be compliant
Also, concerning exchange launch in November I guess you got necessary trading licenses or you are about to get those. Am I correct? Please don’t feel like you need to answer this question if you are unable to.
Because we’re not holding/transmitting/custodying any funds, we don’t need licenses which allow us to do so. By listing only BTC vs USD or EUR and not controlling the funds of our clients, and keeping away from certain jurisdictions we are able to operate without a license for our initial soft launch. The goal is to obtain some licenses — such as the broker-dealer one and the bitlicense — to be able to expand our business model.
Where are you based and which market (us/Europe/asia…) you consider your priority market??
We are based between NY, USA and Bordeaux, France. Our priority market is not a geographical one: we’re targeting institutional clients — wherever they come from as long as they pass our KYC and AML and are compliant.
What are the requirements for using LGO markets during the soft launch in November? What would qualify someone as an ‘Institutional Investor’
To be able to be a client of LGO Member, one essentially needs to pass the onboarding:
- Be an institutional client: a business which manages money for others
- Pass the KYC and AML screens of both LGO and our partners
- Be able to justify the origin of the funds traded
Don’t you think it would make LGO investors and LGO life easier if you guys apply to do a token security instead of a utility that is acting as a security?
What’s your plan on that. I find it weird to apply to a broker license while having a non declared security token powering the platform. Will it not be a problem to obtain such licenses?
The LGO token and the LGO Markets trading platform are two different things.
We’ve had legal opinions from lawyers stating that LGO is not a security under the French law — which is necessary to list the LGO token on platforms like Bibox, IDex or AirSwap.
Now LGO Markets as a trading platform, has to apply for a BD license to list digital securities, period. Independently of how we got funded.
Will non-institutional investors be able to observe the trading action on day 1? Or will it be completely private for institutional investors? Observe as in view, but not participate
We’ll provide some data to non-clients but most clients will have full access to order book and trade data
Could you list the partnerships with LGO until now? It not clear on the website and we wanna to know that ! Neoexchange already listed such as FATTHOM lab, NEO, connect capital…. we should also do that! Please make it clear to we know that !!!!
Our approach is to underpromise and overdeliver, it has always been the case and will always be.
I don’t know about the NEO partnerships, but as a matter of fact, a lot of ICO companies are more focused on their marketing and PR than actually getting things done. This is not our approach.
We could have announced dozens of partnerships but in reality, they wouldn’t have meant anything
We have very strong outside collaborators and are working on partnerships — our business model forces us to do so — but we’ll never communicate something which is not certain. You’ll have updates in the future.
I know it’s frustrating, but we focus our time on doing things, that’s our approach!
What are some business development plans you have for the near future for LGO Markets, LGO Exchange, LGO Launch
I’ll speak for LGO Markets and LGO Exchange. You’ll have to see with Hugo Finkel for LGO Launch :)
LGO Markets: the plan is to become the reference institutional trading platform for digital assets. That means being fair, transparent and secure, respecting the different trade processes (execution — trading — settlement), being regulated (we’re applying to the Bitlicense and broker dealer) and have a very low counterparty risk.
LGO Exchange: the plan is to bring the same guarantees that we give to institutional clients to retail clients. Small guys have been ripped off by a lot of the current cryptocurrency exchanges — which are not fair and professional — and we want to solve that by giving institutional grade services to a retail audience
Are fees going to be burned in LGO on LGO Markets and how is this going to be done? Manual or automatic?
Yes, fees collected on LGO Markets will be used to buy back and burn LGO tokens. The process will be manual at first and automatized in the future
Can you give any predictions as to what sort of volume of trading you are expecting in the first few months after Launch? (In terms of Fiat or BTC is fine).
Hard to make a clear estimate for the first few months as we are going after a market that is currently unexplored: the institutional markets. Our internal goal is to quickly become one of the largest exchanges in volume. The timeline of how quickly we will get there remains unclear.
Any company giving you an estimate of future volumes is trying to predict the future — and we don’t believe in magic, only hard work :)
Could we get a status update on the Whitepaper? And since it’s not out yet, could you kindly just confirm that the main points of LGO token remain the same, i.e., all fees (LGO Markets and LGO Exchange) must be paid only with LGO tokens and 25% of them are going to be burnt in every transaction, right?
Fees collected in fiat on LGO Markets will be used to buy back and burn LGO tokens.
The White Paper is still in the process of being reviewed by our lawyers to ensure it is legally compliant. Once this has been completed, it will be posted for the community to read, We sincerely apologize for the delay, and thank you for your patience!
What is the marketing style that LGO Markets is adopting for the upcoming Launch? Are you visiting clients? Targeting specific groups in specific regions? Or is it traditional media outreach?
We are in constant contact with interested trading groups, asset managers, banks and fund administrators. Our platform is unique to what is currently being offered in the space and interested parties instantly see the advantages. We want our outreach to be more organic and on a personal level and these established relationships creates trust and shared interest opportunities.
Will you offer any form of insurance policy to help cover any losses due to hacks and security breaches?
Very good question — this is something we are currently working on. Hard to promise anything as it’s a long and uncertain process, but be assured that we are actively working on it.
LGO Group’s mission is to build confidence in all stages of a crypto-asset’s life: from creation to sale, promotion, acquisition, storage, and use. Our ambition is global. We want to enable large financial institutions with the ability to trade cryptocurrencies with complete confidence and trust while providing retail investors an identical secure framework.
