- Crypto exchanges are able to fake trade volumes by wash trading and publishing their own unverified numbers – a practice that is hurting the crypto industry.
- “We managed to build an exchange which is provably transparent, meaning we can prove that all our trades are genuine… we can prove it with data which is stored on the blockchain.” Said Hugo Renaudin – LGO Markets CEO – in an exclusive interview with BitStarz News.
- Crypto exchanges are being forced to evolve and adapt to suit tougher industry regulations and demands from traders all around the globe.
There are thousands of crypto exchanges around the world, but so many are risky and dangerous to use owing to sloppy technology and poor practices. LGO Group has decided to build blockchain technology into the core of its brand-new crypto exchange, as well as designing it like a capital markets product, to create a truly next generation crypto exchange.
Alex Meears caught up with Hugo Renaudin – LGO Markets CEO – to find out more about how this pioneering crypto exchange is looking to shake up the crypto trading world as we know it.
AM: Could you tell our readers a little bit about LGO?
HR: LGO is a new kind of financial exchange; a new way to exchange value and assets using blockchain technology and cryptography. You can think of it as the next iteration of Nasdaq in the same way that the Nasdaq was the next iteration of the New York Stock Exchange – with the Internet and the computerization of systems. We’re building a platform which we want to be truly international, focusing on an international market where any kind of investor – whether they’re retail investors or institutional investors – can sign up and trade financial, digital, and tokenized assets.
We are implementing a full suite and believe in state-of-the-art security and enhancing transparency. Our company is LGO Group. At the moment, we have launched the first iteration of our platform: LGO Markets. LGO Markets is dedicated to institutional investors. Later this year, we’ll launch LGO Exchange. It uses the same technology as LGO Markets’ does, but this time this exchange will be dedicated to retail investors.
AM: Do you build everything in-house?
HR: We have a team of 15 full-time developers in-house that have designed and built our trading platform from the ground up. A lot of hard work has gone into every little detail, and by building it in-house we have been able to fine tune each and every individual component to help it fit our vision and goal of being completely transparent and secure. There are a few critical reasons as to why we chose to build it in-house.
The first reason is that the current technical way of building a cryptocurrency exchange today is not fit for capital markets. There’re a few problems with current exchanges. One – the redundancy is not good. Two – the technology is not that good, and three – quite possibly most importantly – cryptocurrency exchanges as they are today are built like a one-stop shop. So, your client will go to your cryptocurrency exchange, store funds with the exchange, get the leverage and financing of trades with the exchange, trade on the exchange, and even lend funds to the exchange. That’s the typical architecture of a traditional cryptocurrency exchange.
When you look to the capital markets and the way they work and the way they operate, it’s the contrary. There’s no one-stop shop. Everything is segregated. There’s a separation of duties for various reasons – the main being that it’s too risky for everyone involved. By building our exchange like a capital markets platform, we mitigate a lot of risks traditionally associated with crypto exchanges.
AM: Fake volume and wash trading is rife in the crypto world, how do you plan on combating that?
HR: We have this traditional structure to our exchange, but we added the benefits of the latest technology to it. Let me give you an example of how blockchain technology is beneficial to our platform – transparency. We managed to build an exchange which is provably transparent – meaning we can prove that all our trades are genuine and they’re not fakes. We can prove it with data which is automatically recorded and stored on the blockchain.
We actually have a module, which is currently live, and it will let you check all the trades on the blockchain. That’s something that we’ve build that you can add to any kind of financial exchange – whether it’s with cryptocurrencies or traditional stocks and bonds.
AM: Could you explain to our readers a bit about why you decided to team up with BitGo rather than creating your own custodial solution?
HR: In order for us to operate like a capital markets product, we don’t want to have custody of customer funds. We’re not holding the funds on their behalf, we simply allow them to trade on our platform using whichever custody solution they want. Just plug the custody solution into our platform, connect the accounts, and then users can trade – it’s as simple as that.
Right now, we’re integrated with BitGo. That means that the market-leading security of BitGo is protecting their funds and they don’t need to worry about dangers such as “what will happen to my funds if the LGO Exchange CEO dies”. In fact, we’re currently building our own hardware solution that will allow our clients to self-custody. It comes as a smart card with a chip and a little bit of code inside that has a range of features, one of those being a multilateral settlement. We designed it in-house so the solution is bespoke and fits our unique needs. We don’t currently take part in BitGo Instant, but if there is demand from our clients we will definitely add support for it.
AM: Getting regulated in top jurisdictions is vital to the success of LGO, where are you currently regulated and where are you working on achieving regulation to help expand around the globe?
HR: Right now, we’re in the process of getting regulated in the U.S. and Europe. We actually have seven licenses pending – five in the US with two in Europe, namely from France. We are currently live in France and Europe as we don’t need a license to operate the way we currently do. However, should we decide to add EUR/crypto trading pairs then we would need the license – something we hope to have in place by the end of 2019 or early in 2020.
AM: What deposit methods is the platform currently accepting and what trading pairs are available? Do you have any plans to increase such in the near future?
HR: You can currently deposit in USD and regulated stablecoins, as well as trade Bitcoin. As for adding new trading pairs, it all depends on client demand. One thing we have worked hard on building is a very good client relationship, and that’s something that we pride ourselves on. We have a dedicated client relationship team that communicates with clients and do a great job adding the human touch – something that’s very important in an institutional business
If our clients demand more trading pairs, we will begin to add them as we see fit, but we won’t simply launch thousands of trading pairs – it doesn’t make economic sense.
AM: What is the fee structure like for LGO Exchange?
HR: There are no withdrawal or deposit fees – you only pay the network transaction fees. There is a trading fee, but it’s in line with the market right now. The way we designed the fees is to provide incentives for large traders and equity providers who trade in large volumes. We have a mentality that’s along the lines of the more you trade and the more you provide to the exchange in terms of liquidity, the bigger the discount you will get in trade fees.
AM: The team is a critical part of any project, what made you pick LGO’s current staff?
HR: Teams are often an area that is often overlooked by a lot of traders and investors. We’ve assembled a great team that is very experienced – each member with their own unique skill sets that they bring to the mix. Currently, we’re 30 people in the company. Out of those 30, 15 are developers, who all have more than 10 years of experience in software development, cryptocurrency and blockchain development, and hardware security – which is very important, obviously.
Our developers are a very serious team, who have done a great job in building the platform. It usually takes around two years to build an institutional platform like this, but our team has done it in eight months. On the business side of things, we’ve managed to recruit very high-profile people. Our CFO was the CFO of a three-billion-dollar business before he came to LGO. Our Head of Sales has spent 17 years in traditional finance with firms such as Citigroup, Credit Suisse, and Bank of America. She’s been dealing with hedge funds and institutional investors all her life.
LGO is reinventing the crypto exchange world one line of code at a time. If you’re looking to try out a new crypto trading platform that is jam-packed full of features to safeguard your funds, LGO is definitely the way to go. On that note, make sure you stay tuned to BitStarz News for interviews with industry-leading experts and to get your daily crypto fix!
