Why Legolas is the next generation Crypto-Exchange (3/3)
How Legolas solves the shortfalls of existing crypto-exchanges
In “Why Legolas is the next generation Crypto-Exchange (1/3)”, we’ve detailed the crypto-currency trading activity.
In “Why Legolas is the next generation Crypto-Exchange (2/3)”, we provided an overview on the current state of crypto exchanges, and touch on the need for a third generation of exchanges.
In this article, we’ll make the case for Legolas Exchange as being at the forefront of this new generation of crypto-exchanges designed for institutional investors.
Shortfalls of Existing Centralized Exchanges contrast with Financial Institutions’ Needs:
Existing crypto exchanges present numerous important flaws and limitations. With no alternatives, the community is forced to accept opacity, capped or slow transactions, and the risk of catastrophic losses. Institutional investors who cannot overlook these concerns are locked out of the market and the trillions of dollars it represents.
What are Financial Institutions’ Needs?
Financial Institutions and more broadly speaking institutional investors have very strict and precise needs when in comes to buying and selling assets like cryptocurrencies. Their requirements are necessary for them to be able to show to their own clients that they are compliant and professional. Requirements include:
- Advanced KYC (Know Your Customer) /BSA (Bank Secrecy Act) /AML (Anti Money Laundering)
- Internal Controls and Trainings
- Compliance Department
- Reputation and Trustability
- Credit Risk Control and Insurances
Legolas Exchange, a Premium Exchange Geared Towards Institutional Investors
What will be the Third Generation of Crypto Exchanges?
The early days of bitcoin and the cryptocurrency market has spurred the development of first and second generation crypto exchanges, oriented towards retail investors looking mostly to convert fiat into crypto.
The end of 2017 and the beginning of 2018 are showing the emergence of institutional investors’ appetite for the market, as proved by the development of crypto-funds, allowing investors to gain an exposure to the crypto-currency market by buying shares of these funds — rather than buying crypto directly- often at a very high price. Indeed, as described above, current second generation exchanges do not provide institutional investors with the guarantees they need to trade on their platform with a sufficient confidence level.
The Vision at Legolas Exchange:
Legolas Exchange is the first crypto-currency exchange for institutional investors providing proofs of fairness and transparency in addition to the highest service quality.
Legolas Exchange is the first exchange created by cryptocurrencies early adopters and blockchain technology experts. Blockchain is not a buzzword, blockchain technology is the central argument that makes it possible to reintroduce trust in an industry that ironically lacks transparency. The offering of Legolas Exchange is built on a semi-decentralized protocol, in which the order books and the trades are saved on a blockchain. This way, Legolas Exchange becomes the first demonstrably fair and transparent exchange, being at the same time secure, fast and scalable.
Crypto currencies are not fully regulated yet, and the best position to adopt is to respect the highest standard of compliance. Thanks to our partnership with institutional brokers such as Makor and Oscar Gruss, the activities of Legolas Exchange are registered with the SEC, the FMA, the FINMA and the FINRA. The KYC and AML onboarding of Legolas users are done the way our broker partners do it, which is with the highest standards of transparency and compliance.
All this leads us to believe that Legolas Exchange will become one of the biggest player in the third generation of crypto exchanges oriented towards institutional investors.
Legolas provides solutions to the main shortfalls of existing exchanges:
Legolas Exchange (https://legolas.exchange) is a demonstrably fair, bank-backed premium exchange for institutional investors. It incorporates a decentralized ledger within its proprietary centralized platform in order to guarantee the inalterability, temporality and transparency of the order book and ensure a fair trading environment.
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