The Wolf Of All Streets - OKX & The Future of Crypto | Hong Fang & Gracie Lin Reveal What’s Next For The Industry

Episode Date: November 10, 2024

In this episode of The Wolf of All Streets, we dive deep into the world of OKX with Hong Fang and Gracie Lin, exploring their global approach to crypto regulation and innovation. We discuss what’s new in OKX’s Web3 wallet, their focus on decentralized self-custody, and what it all means for the future of digital assets. Join us for insights into the global crypto landscape and OKX's bold vision! Hong Fang: https://x.com/hfangca Gracie Lin: https://www.linkedin.com/in/gracie-lin-a8866361 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► The Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://thearchpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #okx  Timestamps: 0:00 Intro 0:31 Singapore Crypto Hub 1:47 OKX Global Expansion 3:00 Adapting for Markets 6:51 New Web3 Wallet 12:08 Regulation & Self-Custody 15:24 U.S. Market Plans 18:27 Bitcoin & Stability 22:52 Future of Web3 25:52 Web3 Gaming Vision The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Bitcoin is a serious project. I don't think we know enough. Singapore seems like one of the most favorable jurisdictions. I would say what's good about Singapore, and that's why we're a crypto hub, is that we have regulatory clarity. You just relaunched basically an entirely new version of the Web3 wallet.

I'm sitting in the brand new media room in the Singapore offices of OKEx, an exchange that I've worked with as a global brand ambassador. And I got the opportunity to speak with one of my favorite people, Hong Feng, but also the CEO of the Singapore entity, Gracie Lin. We talked about the challenges of regulation, the structure of their business, and how difficult it is to operate in multiple jurisdictions with multiple regulators.

But what really excited me was the conversation we had about what's coming from them, what's coming from the industry, and what excites them as we move forward into the next generation of crypto. We're here in Singapore. Last year, we did an interview down in the game room. We've upgraded to this media room now. We're moving up in the world. But I came, obviously, with the intention of having an interview with you. And you said, we've got all of our CEOs here. Gracie, you're the CEO in Singapore.

I didn't know you had so many regional CEOs. This is quite the operation. Yes, yes. It's been fun. It's great to have Gracie with us. She's great, yeah. So how many different regions are you operating in where you have individual CEOs?

Eight to 10, I would say. Yeah. Gracie is a recent addition to that team. We obviously have Europe, where we operate out of Malta. Our general manager, local CEO, is in Malta covering the whole Europe region. We have Dubai. ReFed is there covering our operation in the Middle East, and particularly for that Vara entity. Bahamas, we have our license there and our local CEO over there. Australia, we got a license in Australia offering our spot business as well as a derivative business for a derivative product for institutions and verified wholesale.

So we also have a local CEO there. And there are a few others that we haven't really talked about because the licensing process is going on. So, but we'll, you know, at some point when the time is right, we'll talk about them. I would imagine that each of them has unique challenges based on our conversations in the past, right, of dealing with regulators in each jurisdiction

and navigating what is and is not allowed in any given place. Singapore seems like one of the most favorable jurisdictions. So you have some clarity here as to how you can operate and what you can do. I'd imagine that's why we're in this amazing office here in Singapore. But what's unique to this market for you that maybe is not as challenging

for other as in other places? I would say what's good about Singapore, and that's why we're a crypto hub, is that we have regulatory clarity. It's very clear what the regulators expect. And so that is a good thing because then we know what rules we have to play by, what we need to do. What makes it also challenging is also then just making sure that we have full clarity or we fully understand all the requirements that we're subject to and make sure that we

follow those rules. But we are very well resourced for that. So we have a very, very strong team of legal and compliance people that help make sure that at every step of the way, we know exactly what we're supposed to do and what we cannot do. And if there are any questions we have, we will consult the MAS. So having that open communication channel and being able to do that on a regular basis,

I think has been very good for us. So challenging, but we have it under control. I joked before we started recording that whenever we do media, it always has to go through a process that honestly I've never seen at any other company. Everything has to be checked. You take everything that is public facing and I'm assuming private very, very seriously, more so than any other organization.

I think so. Yeah, yeah, yeah. And I'm actually kind of coming so, yeah, yeah, yeah. And I'm actually kind of coming back, going back to your previous question of the challenges and the work we need to do at different jurisdiction, right, it's not just making sure that what we offer is compliant with local requirements, it's also understanding local customer dynamic understanding

what the product we want to offer what's the long-term strategy and and then making sure that we actually execute it well that is actually yeah a lot of work for our local ceos because they have to work with a local team but also with group resources to make sure that we actually deliver. We deliver in a responsible way to the local community in a very steady and measurable way. So, you know, it takes time for every jurisdiction. It actually takes time, takes a lot of efforts from Gracie and her counterparts in other jurisdictions. When it comes to communication, yes, we're very careful

because we do not want to intentionally or unintentionally mislead anyone. So we wanna make sure that we are saying what we see and what's actually happening and do not over promise. That's a big thing for us. That's something really interesting that we've never discussed. We always talk about the regulatory challenges

in each jurisdiction, but I never thought about the actual customer base in each jurisdiction. Well, it's very different. And their needs. Very different. So anecdotally, we obviously know that certain people love meme coins

or certain people are trading Bitcoin only or certain people love other altcoins. But how do you see from market to market? How do you identify which product to push forward? Which, obviously, we know that regulatory reasons for what actual you can offer for trading. But how do you decide sort of how to put the product forward in each of these different places and markets?

Yeah, I'll let Gracie opine on Singapore, but generally speaking, we really rely on our local leaders, local CEOs to make that strategic and business decision. Because again, every market is different. There are different customer segments. You can think about institutional wholesale retail, but then within institutional wholesale retail, there are also different types of customers, right? People who are more familiar with crypto versus not, people who probably want to, you know, having a more financial goal versus more utility orientation.

Even within crypto native, there are also, to your point, different tribes. So, you know, what we want is to really let local leaders make that decision. And local leaders would include local CEOs, but also local functional leaders, including compliance, legal, risk management, and product. That's the direction we have been investing toward,

just to kind of, you know, when we leverage on the global resources at the global group level, we also want to empower our local leaders to gradually build that local center of excellence. Because, you know, when we talk about global customer needs, it doesn't really mean anything. Right.

What American wants and need is very different from what Singapore customers want and need. So what do Singapore customers want and need? Well, we are still in the process of figuring that out. I mean, I don't think we ever really know what a customer needs. Sometimes a customer doesn't really know either. So it's a process of learning, research,

talking to people, talking to customers, testing something out in the market and seeing if there's adoption. So it's a process. It's a process and it's constantly evolving, I think, along with the industry, along with the market as well. And depending on which part of the cycle we're in, customers may want different things as well. So we just iterate and we just make sure that we try to do the best we can. You have your first iteration, right? Yes. And I was going to say the thing I've noticed the most, I think, about OKEx is that you're always iterating, always improving, always moving forward. I've obviously talked to you and both Haider about the partnerships you do, but I'm obviously wearing a McLaren jersey with OKEx, but because they're so tech driven,

it really aligns with the ethos of what OKEx does, the way that they change the car every week or every month, depending on their needs. You just relaunched basically an entirely new version of the Web3 wallet at Koken 2049 with Lando Norris. It was really cool. So talk about what's new there, why you changed it, because it was already an incredible product. We feel very proud of the new update to the Web3 wallet. Hyder also spent a lot of time on that with our product team, product design team, engineers, and Web3 team. One of our primary convictions as a team is that the future is decentralized. The future is self-custody.

So regardless of what else is going on in the industry, we have made it our commitment to really invest and continue to invest in Web3 technology and Web3 product. But one big gap that we are seeing in this space that is basically blocking or slowing down mainstream adoption of Web3 wallet is really the usability, the interface, right? How do you actually make it easier for people who are not familiar with the technology to have less fear about learning and going up the learning curve? And also, as you can see from our partnership, we also put a lot of emphasis into the spirit, into the underlying value, into design, and using that design to inspire people.

And you can see that same philosophy in the new iteration of our Web3 wallet, which is really not only having a very solid Web3 technology underpinning the product where we can actually connect to a hundred plus change which I think is pretty unique out there in the Web3 offering but also really put a lot of more emphasis into you know design and help it stand out a little bit more and we are we also have more innovation related to Web3 product that we're kind of currently in the roadmap and in process, hoping that by the end of the year, something on top of that, something new can come out and see how the market reacts. But we feel very excited about it. And Hydra feels personally very proud of.

He should. Yeah, yeah, yeah. He's a rock star. He is. He really is. He is. And I would have to imagine that a decentralized Web3 wallet to some degree transcends some of the regulation.

You can use it maybe in a lot of places in different ways than you would be able to use the centralized exchange. I can use Aspect 7, obviously, in the United States. Yeah, yeah. So you're disrupting yourself, but you're also giving, I think, customers more of what they want in more places. Yeah, I think there are two things.

Gracie, feel free to jump in here, But there are two things related to the Web3 product that you were basically referring to. One, it does give options. And we do want to give our customers options. We started as a centralized platform. But the centralized capability of custody is not what we want we are just offering it as a service to make it more convenient for the customers and we do take the security and safety and transparency of that custody very seriously that's why we continue to iterate on our wallet infrastructure and and also you know develop our proof of reserve program and have been running it consecutively for a long time. And we put the wallet in the same app so customers can actually

have the option of switching. And we want them to actually switch more over to the self-custody side. The second piece around regulation, I think the jury is still out there how the regulation will evolve around the decentralized technology. And again, we are open to how that whole framework will evolve over time. Obviously, right now, we're still in the face of coming down to a more mature framework for a centralized product, a centralized platform. And we're happy to be an active participant to engage in those conversations as we as an industry together with Regulator figure out, you know, is that something that needs to be regulated, how to regulate it?

We are open minded about it. It's not something that we try to use to bypass regulation, right? It's ultimately it's all about customer experience, customer protection, and customer empowerment. So we're also learning as well. Yeah. I just want to add to that from the Singapore perspective. We talked about, you asked about the Singapore user,

what they're looking for. Convenience, that's a big one. They want the user experience to be as seamless as possible. And that's why we have a couple of enhancements that are coming up. Actually, we rolled out something already, SingPass KYC. It's just a much more seamless, frictionless way for a user to onboard onto our platform that was rolled out earlier this month. We're also looking to roll out Fiat on-ramp and off-ramp so that users can get money in and out of the exchange a lot more easily. So convenience is a big one, definitely for the Singapore users,

just as it is for any of our other users in other markets. Nothing is convenient for us in the United States. Yeah. We always seem to come back to this conversation, but I think it's inevitable, especially in context of how quickly it seems to be evolving, especially with an election coming. And I think that in many people's view could sway

at least the way the industry looks for the coming years. And the inevitable question then is, when's OKEx coming back in full force, not to the left, but to the United States, because I know you have big plans there. Yes, we do. We have been working on it diligently. I would say over the last year and a half, we've been putting OKCoin business in the U.S. in a high as we kind of prepare for that rebrand.

And I think we're getting to the very end of the process. Hopefully before the end of the year, we will be able to bring our product back to the U.S. under OKEx brand in a very compliant way. And the vision, again, is to be able to really offer our product in a differentiated way in U.S. Obviously, the large population wants to buy and sell, but we do not want to just be a simple replication of Coinbase. Right, of course. There's another already Coinbase. Obviously, we want to be an option, right, that customers can look at and evaluate when they look at, you know, simple buy and sell. Different optionalities is always good for the customers, but we also want to bring in more than that. We want to be able to offer a simple app where they can actually use it to access more, not only within the buy and sell kind of between TradFi and Web3, but also how to actually

bring the Web3 utility to more people. How do we actually touch a broader population with, say, a simple client, the payment utility? And how do we introduce people more to the Web3 world in a simpler way, even more convenient than what we currently have in the Web3 wallet? So there are a lot of those things that actually is now in work. And I'm very much looking forward to bring it into life by the end of this year in US, finally, back to our home turf. Yeah. It's interesting talking about just the buy and sell functionality because there's so much more to this. It was never meant for just a speculative asset or to just be an investment. It was meant as a disruptive technology, obviously, to any incumbent with a third party in between. Exactly.

But every time I say to someone, well, look how fast I can send a stable coin or look what this does, I go, I can do PayPal. In the United States, everybody goes, we've got PayPal, we've got Venmo, we've already got digital money. So how do we differentiate and make it even easier than those? I think that's a great question. I think it really goes down to why we're doing certain things. And the why is not because we have new technology, but because what the customers actually want, what the customers are really missing. Right. So my humble point of view is that, first of all, one of the most fundamental use and need from the customer, regardless of where you are, is that is the the hedger against inflation risk is the hedge against the

geopolitical kind of risk and the global risk of disability and sense of uncertainty. I think that in itself is a either a promise or a hope that crypto Bitcoin in particular can actually offer to two people. Obviously, there's Bitcoin ETF available, but can we get more people into native Bitcoin ecosystem? The other part is, you know, when it comes to available, but can we get more people into the native Bitcoin ecosystem? The other part is when it comes to payment, as you mentioned, stablecoin. Is stablecoin payment 10 times or 100 times better than the current payment system in U.S.?

Probably not. But maybe there are other things that we can do based on a programmable money. Jeremy was referring to the future on a programmable money. Jeremy was referring to the future of more programmable money, right? So is there anything other than just pure payment that can happen within that stablecoin ecosystem to start with? That's, I think, something that would be interesting to explore as an industry, not from our perspective as a platform, but as an industry. I think there are a lot of projects out there that it's kind of exploring that hopefully that can disrupt the traditional financial system and bring more efficiency and transparency within the system.

Maybe that is an angle when we think about the value proposition, even in markets like US. It's interesting, we have this bipolarity in the industry. Now we have BlackRock and Larry Fink saying the same things you just did, a hedge against inflation and global risk. We used to be crazy for saying those things, so now you have Larry Fink and others saying it. The flip side is we have this sort of degenerate side

that's launching millions of meme coins every day on Solana. How do you navigate deciding what to take seriously, what direction to push in, what to list? I know there's regulatory challenges, but even in a vacuum where there weren't, you can't list everything. No, I don't think we can decide. I don't think we are here to make that type of judgment, what is serious and what is not

serious. I mean, if you go back 10 years or more, how many people would actually think that Bitcoin is a serious project? I don't think we know enough, you know. So from from our perspective, at the group level, when we look at listing process, we we have our own process like we would have business team looking at the business projects from different angles. We would have our compliance and legal review the risk, and then committee

will actually evaluate the risks. There are red flags, obviously, like, for example, privacy coins we do not touch, right? If there are significant compliance risks that we see with a certain project, the committee members will make their own decision of that risk assessment. But ultimately, you know, is meme coin project good? Is, you know, some other projects, you know, have a future value? I don't think we are in a position to really judge, to be honest. I think it's really about letting the market, at some point, we have to let the market decide. And we are here as a platform to kind of enable that. I'm saying this more at the group level, obviously.

Different jurisdiction have different regulatory and compliance requirements for listing. We've seen exchanges in the past that didn't end up so well listing things immediately. The second that they were launched, I would imagine actually that the very fact that you have this compliance process and it has to go through different levels eliminates 99% of the things that are being launched anyways, because by the time

they would get through the process, they've probably that's off. That's true. That's probably true. But at the same time, I think a lot of the things would also put responsibility on listing team. If certain token does not perform well, then the listing team would need to review how they actually evaluate different projects. What are the things that we should be looking for? So it's a living creature, so to speak.

We have to continue to iterate based on our understanding of certain things. I think to some degree degree the industry is still waiting for the next killer app or the next exciting narrative bitcoin certainly stable coins i would argue have been the killer app so far are there any since you're always thinking way ahead i would imagine is there anything that's really exciting you that you're seeing uh in the industry right now that you think might have real traction with the mainstream in the, I don't want to say coming months, but in the next few years? I think it's one of those things where the market doesn't really know before they see it,

and then they realize that they actually have a need for it. What Hong mentioned just now, the self-custody, I think that's a big one And I think the industry is moving in that direction in terms of innovation. In terms of what customers are talking about, what they are concerned about, what they're looking for, I think it's actually a very good fit for that. So I think that's one big one for me. Yeah. The self-custody piece, again, that's some area that we have been really heavily invested in. I think our, as industry participants, particularly OGs, every time when there is an industry crisis, right, we always say, oh, not your keys, not your coins.

Guys go own your own wallet, but somehow the adoption of such a cold wallet, if you will, hasn't really been as fast as we would like to see. So we also are reflecting on why and try to kind of invest in product to make it easier for that adoption. I think that's one big piece that we feel like it's important for the industry to evolve because you need to have that infrastructure to reach more people. It's probably part of the infrastructure where some of the projects,

non-financial, non-trading project would need to more conveniently reach more users, if you will. I think that's the one part. The stable coin as payment may be interesting, more powerful in markets outside U.S. Much more compelling in Venezuela. Exactly. So I think that would continue to evolve.

I think that probably is a way where we can see a whole new alternative may develop around stable coin system for a financial kind of infrastructure in Web3 instead of in a Web2 format. I think that would be interesting to observe. I think in developed markets and developing markets, maybe, you know, I was talking to a few gaming QLs during this week, and I think a lot of them were actually, they started in Web 2.0 gaming,

and some of them started to get interested in Web 3.0 gaming, and they actually see real value and interest continue to grow in that space. Is it going to be some application that will reach 100%? Mess? Probably not. Gaming never reached 100%, but it's a possibility where we can see a different environment with Web3 technology. Gaming would have been my first answer.

Right. I think everybody got very excited about it last cycle. And as we always see, it doesn't quite happen when the first hype cycle and then everybody forgets about it and it suddenly takes you by surprise. But I've seen really compelling AAA games being built with blockchain functionality that we didn't have before. Yeah. A lot of the conversations I've been having this week have really been centered around gaming and different

applications of Web3 gaming. And it seems that the traction in general has been really, really promising. So I do think you're right. There is something there. Now I would ask you what your plans are in gaming and all the plans you have. I guess that just means we have to schedule again.

Yes. The next time you have a huge update, which we seem to always get the scoop on first. So thank you so much for your time. Thank you, Scott. Especially when you've got so many CEOs running around here talking to me. Thank you.

It's an exciting meeting. Thank you. Thank you so much. Let's go.