Thor Chan joins us to discuss how you can create, grow and secure your wealth with AAX.
Thor brings a wealth of experience to help shape AAX’s company’s product development strategy – ensuring products are relevant, trusted and institutional grade. His experience includes building global order management systems, global settlement systems and low-latency trading platforms for both retail and professional traders. He was licensed in Hong Kong to manage equities and derivatives brokerage and trading operations. Thor has held previous roles including deputy COO at FDT Group and product management at App Annie, Microsoft, Publicis, and HSBC.
*Disclaimer. None of this information is financial advice.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:00:03:16 – 00:00:18:18
Richard Carthon: Hello, everyone. Welcome to another episode of Crypto Current, your host here, Richard Carthon, and today I got a very special guest all the way out in Hong Kong working on a really cool exchange that I’m excited to learn more about. We got Mr. Chan with AAX Exchange. How are you doing today?
00:00:19:28 – 00:00:22:02
Thor Chan: Good, thank you. Thanks. Good talking to you again.
00:00:22:19 – 00:00:26:12
Richard Carthon: Of course. Well, before we get started, how about you give us a little background on yourself?
00:00:27:21 – 00:01:24:00
Thor Chan: Yeah. So, I’m Thor Chan, the CEO of AAX. AAX is a Cryptocurrency exchange platform I founded one year ago. And then like, right now we are offering spot trading, derivatives trading and also, like we have on and off ramp infrastructure. Right now, we have users from around like, eight countries, 500,000 users. Our platform is powered by London Stock Exchange Technologies. We are using the code matching engine, the same matching engine used in 40 different financial markets. We are focusing on performance, integrity and security. We are trying to target both institutional and retail uses, mostly in the Asian countries right now. Based in Hong Kong, it’s very good to talk to you guys.
00:01:24:26 – 00:01:40:17
Richard Carthon: For sure. Well, I mean, it’s great because we have a very international audience that’s continuing to grow, but I’m sure before we learn a little bit more of what you got with AAX to learn a little bit more about yourself. So, how about you give us a little bit of background on who you are and how you even got into the space in the first place.
00:01:41:09 – 00:03:00:00
Thor Chan: Got into Crypto in 2015, 2016. When I started, I was doing a lot of trading. So before AAX, I was actually working in the finance industry, and was a responsible officer for Type One Timeline Essence in Hong Kong. So, Type One is mostly for brokerage business. We focused on equities and we had tips in Asian markets. And also we do asset management and day trading. And then we have a trading firm, so like, we did a lot of day trading equities in Hong Kong, U.S. and also like in China, stocks mostly. I think like there was a market crash in 2015 in China, so, that’s where like, we started looking at different market opportunities and then like, Okay, is there any good market that has maybe some instruments with very, very high volatility, at the same time liquidity. That’s where the point that Bitcoin caught our attention because there’s actually a lot of like, similar nature of China equities and stocks actually.
00:03:00:02 – 00:03:00:17
Richard Carthon: Yeah.
00:03:00:19 – 00:03:14:18
Thor Chan: So like, we started day trading a lot of Bitcoin and then we didn’t make as much money as those like, hotellers, because they just buy and get more money, day traders.
00:03:14:20 – 00:03:15:05
Richard Carthon: Right.
00:03:15:07 – 00:03:47:28
Thor Chan: But that’s the story of how I started like the Bitcoin and Crypto trading. After the market crash of Bitcoin in 2018, 2019, we started looking for opportunities to be a Cryptocurrency exchange platform because in trading, in our experience, we didn’t find that the platforms are very stable.
00:03:48:00 – 00:03:48:15
Richard Carthon: Right.
00:03:48:17 – 00:04:12:03
Thor Chan: And even for the technologies that we used may not be very compatible. I think like right now in the exchange space, everything seems to be much better than two years ago. So like, that’s actually also the point that why we wanted to build a Cryptocurrency exchange. We don’t want to have the overload issues, we don’t want to have the audible frozen.
00:04:12:15 – 00:04:13:00
Richard Carthon: Right, liquidity issues.
00:04:13:02 – 00:05:13:20
Thor Chan: We don’t want to have credit issues and account balance is frozen. So, we encounter a lot of issues because we traded in many, many exchanges before we started in exchange. When we tried to look into this issue, we wanted to see if we wanted to build an exchange. We may not be able to really solve all these issues, so, maybe we need some help. We started talking to some experts in the exchange technology space. We have a co-founder, Michael and he got very close to the London Stock Exchange. We tried to talk to them and say, “Hey, you guys have a very, very good matching engine technology for your stock exchange, can we try to apply it to the Crypto market?” That sounds very crazy actually, like the way we try to do it. Actually they said, “Oh wow, maybe that’s good.”
00:05:13:22 – 00:06:06:24
Thor Chan: The London Stock Exchange for technologies, they are providing their matching engine and trading technologies to 40 different financial markets, not just for the London Stock Exchange, but also for some countries in the financial markets in Italy and in Europe and also like Asia. That’s only limited for traditional equities and the market, but not for Crypto. So, that’s actually a very, very good exploration with them and then we started the discussion. And then I think like I met with the tech team, I met with the people to see how we can make that matching engine fit into the Crypto space. So, that’s actually quite challenging because we need to make sure that like, it’s 24/7 ready.
00:06:07:03 – 00:06:07:18
Richard Carthon: Right.
00:06:07:20 – 00:06:48:23
Thor Chan: And also, cause Crypto is 24/7, never sleeps. A market, you have the beginning of day and end of day, the market closes and you can restart your system. We can’t do that. Fortunately, I’m coming from the tech background. I try to work with the team very closely to try to solve these issues, so we make that technology just 24/7 ready. And also, we try to put the matching engine on the cloud surface, so that we can manage it very easily. So, that’s how we started and then like how I joined to do Crypto, this strange journey.
00:06:49:16 – 00:07:33:00
Richard Carthon: You know, that’s really unique because you identified some challenges and you’re like, Okay, how do we best solve them? And then, you found a way to potentially partner to be able to make your platform much stronger, but then also be able to make sure as things scale up, as we kind of leaned into before we got onto this conversation. Institutional money and more people starting to become involved in this space are going to want to find stable platforms that they can get into and that they know are going to be reliable and that they can grow with. And the fact that you are kind of looking at it from a standpoint of how can we best serve all of our financial audience, I think that’s pretty unique.
00:07:33:02 – 00:08:25:11
Richard Carthon: And just like you said, very challenging at the exact same time to go from a finite amount of time, this is when the market’s open to, Hey, this is 24/7, all year. Like, that’s a tall task, but if you can tackle it and you do it well and help with that overall customer experience and trader experience, I mean, I think you have something solid. So, I know you spoke on a couple of different ways that you’re addressing some of those challenges, but like what are some ways that your users are enjoying your platform and are kind of utilizing the various tools that you’ve been able to create? You know, what are some of the various features that your platform has that’s unique to AAX?
00:08:26:23 – 00:09:44:29
Thor Chang: Right now we’re on a platform. We are offering like, spot trading. I think like for spot trading, we have pretty much the same features that we’re offering, because very standard, but we are very selective in the Crypto pairs that we have that are quick and then like those pairs that’s nothing, just a ton of dumplings there. And then like right now, we are offering both USDT Collateralize and BTC Collateralize contracts, so you can use both BTC and USDT to trade our perpetual contracts. Maybe you might need some exchange, you can use maybe BTC to trade or like maybe you can only use this to trade without your contracts. So, we are allowing both for users to trade. For us, because we are having a pile of uses in Asia and also in some European countries and Russia and Ukraine, we are actually having a very good Fiat offering infrastructure for users to get their Crypto with the Fiat cash money. They are feel based that we are supporting the Fiat on and off ramp.
00:09:45:01 – 00:10:50:16
Thor Chang: First, we have our am to pm marketplace, so that we have merchants to sell them. If you want to buy and sell anytime, if you find motion, you can find and sell very easily. One very unique thing for our platform is that we recently launched a trust bank account transfer. We are supporting 11 different currencies. And then, if you want to buy Bitcoin, if you want to buy USDP with your local currency, you can first deposit your money into our trust bank account. It’s a licensed trust entity in Hong Kong that you can trust, put your money in and then like once you get your money, you can use the money to buy and convert your USDT and BTC. So, that’s actually the features that we’re offering. I mean like, for exchange from the future perspective, they are pretty much the same. I mean like, they have a very similar policy, but like, we are also focusing on other things like the system performance.
00:10:50:18 – 00:11:31:27
Thor Chang: Like I said, we are partnering with London Stock Exchange to provide the core matching engine for users. And then right now, we can let users in some maybe very, very professional uses. They can connect a matching engine directly through a fixed K-way. I think like in the market, there are some other exchanges that are providing maybe fixed connectivity, but the fixed connectivity or the risk management control and what is featured, they have no comparison. What if like some mainstream findings and like traders, they want to connect through the same way that they did for the equities market.
00:11:32:03 – 00:12:00:27
Thor Chang: They may not find a second and say, but we could provide the same infrastructure because that’s actually the same infrastructure they could trade or maybe with a similar selection. That’s the technology that is very unique in the market. In terms of security, we can talk a little bit more about that. It’s not specific features, but something that we make sure that people can feel confident.
00:12:00:29 – 00:12:01:14
Richard Carthon: Right.
00:12:01:16 – 00:12:16:15
Richard Carthon: Right, in exchanges, because unfortunately, there’s been a lot of exchanges that have had issues where, unfortunately, users have lost money. So, security is definitely a big thing to know more about and to focus on. So, yes, I definitely want to learn a little bit more about the security aspect of it.
00:12:17:08 – 00:12:25:08
Thor Chang: In the past few months, not just exchanges, but a lot of DeFi projects got hacked.
00:12:25:10 – 00:12:25:25
Richard Carthon: Yeah.
00:12:25:27 – 00:13:20:15
Thor Chang: And suddenly, like, all the assets got stolen and then like, Oh, it’s gone. And then millions of dollars like, gone. That’s terrible. For us, when we tried to start the platform from day one, we were not just looking at cybersecurity as part of the platform security. Cybersecurity is only one thing, because I’m sure if we look at some hacked cases or some people who’ve lost their digital assets, not just because of cybersecurity, but also maybe in the exchange or the platform operation or maybe internal control or like the people working inside. These are all the things that like from day one, we tried to build a more comprehensive security framework to attack all of these aspects.
00:13:20:22 – 00:14:09:12
Thor Chan: So on day one, we actually, of course, when we started it, we didn’t have all the security experts in order to do that, so on day one, we partnered with Pro. Pro is a security agency with a lot of security experts. They’re serving a lot of government agencies and also investment banks and very big banks in the world. So, we got some support from them to help us to rebuild the security framework and also some operation procedures and even like how we select people. So, these are the things we are not trying to do right now, but we started building them and then like creating them from day one. Even when the platform is ready, we started doing this security work already.
00:14:10:09 – 00:15:02:25
Richard Carthon: Well, that’s great. I mean, the fact that, again, you found a really good partner that can help you with some of those challenges that are already working with government agencies and have the track record to show that you can trust with working with our platform. It’s a big deal. Just knowing that before going on a new exchange, knowing that your money that you put on there is going to be safe, that you can get it back and you don’t have to worry about that is definitely a big deal. So, thanks for walking us through a little bit more about that. Overall, like, what is the current roadmap of like, where AAX is and where you’re headed as you’re looking to continue to grow out this platform? You know, who’s your ideal trader that would come on? Is it your institutional traders, someone that has experience in the equities market and is now trying to look and dabble into the Crypto space? What does that look like?
00:15:04:16 – 00:16:09:26
Thor Chan: We share a passion for design for both retail and institutional investors, because for the retail side, we have a mobile app that’s very, very easy to use. So, that’s how we’re getting the retail side and for the institutional side, we go very extreme to provide them fixed connectivity, native K-way and also like the standard of WebSocket and rust API. So, these are the things that we provide for the professional investors. So for the platform, because we need various flows on the platform, so that it would grow healthy. I mean like, if we only focus on maybe retail and then like a platform, that would be great. The institutional side, we would see the people find it there. If we focus on the institutional side and then like maybe okay, it’s if we would get a lot of like the professional market to disrupt them. But for us, we want to be like Cryptocurrency exchange with a mix of flows. So, it comes with a platform.
00:16:10:20 – 00:16:11:05
Richard Carthon: Right.
00:16:11:07 – 00:16:44:12
Thor Chan: I mean, of course, if you asked me like, what would be the major asset and then the time and energy to focus on these two segments, we actually will focus more on the retail side to build the platform in marketing. But for the institutional side, is more on the business environment. That’s actually less resources that we put for that side. But for the technology side, I think there is one platform and one infrastructure.
00:16:45:15 – 00:17:09:15
Richard Carthon: Gotcha. Well, definitely, thanks for breaking that down and as of the date of this recording recently, you know, Bitcoin has reached all time highs. You’re starting to see a lot of money being poured into the overall Crypto market cap. It’s a great time to be in what do you see as we head into 2021? Like, where do you see the Crypto market as a whole?
00:17:11:25 – 00:17:55:18
Thor Chan: Yeah, I think the Crypto market, especially like the major digital assets, the price will still go up, I think, especially for maybe the major assets like Bitcoin, Ethereum and then like those assets that are recognized by the institutions. And then like those institutions, they think like they can put them in their portfolio, that will be the big trend, especially like last night, there’s a lot of news about ABC Company. They are putting Bitcoin in their portfolio to allocate more assets in their portfolio.
00:17:55:24 – 00:19:08:05
Thor Chang: So, we can see that the trend that the asset managers will start having Bitcoin as a major place is not as significant as maybe a stock yet, but at least maybe like two percent allocation, three percent allocation, that will make sense for them. Or like maybe like instead of like, having maybe five percent gold in total in their portfolio, they maybe split it into maybe two percent Bitcoin and three percent gold. So, there will be the trend that this asset manager’s when you are going to put Bitcoin into the portfolio. I think this is not just happening in Europe or the U.S., it’s also happening like quite fast in Asia. I think like right now the regulator is in Hong Kong or in Singapore, or like in another major financial hub in Asia. The asset management side or like the officers, they also like having a lot of inquiries and they ask, How can I buy Bitcoin?
00:19:08:07 – 00:19:08:22
Richard Carthon: Right.
00:19:08:24 – 00:19:46:00
Thor Chang: How can I transfer my Bitcoin into my portfolio? So, these are the questions we, especially in late 2020, I got asked about these questions like quite often. And I think it’s very obvious that institutional Biforce is coming. I think like because of the news that like firstly, in September, there was a lot of news about microstrategy, putting 425,000,000 into Bitcoin.
00:19:46:02 – 00:19:46:17
Richard Carthon: Right.
00:19:46:19 – 00:20:35:18
Thor Chang: And then like, but now they have more money of course. And then they raise more money to buy more Bitcoin. So like, it seems that like, okay, it’s not just that they would buy more and more coming. And then like at a certain point, some of the other institutions, they’re following up. And then they see that like, even like now, like breaking the all time high, it’s actually like maybe less than 10 percent from the last search, price search. For these people and then like the portfolio managers or like they put the asset there, they are not expecting that. They are going in you know, maybe within weeks, or like maybe weekdays, they’re maybe putting their kid in there for months and then like for a longer term.
00:20:36:18 – 00:20:37:03
Richard Carthon: Right.
00:20:37:05 – 00:21:14:13
Thor Chang: It’s actually the price for us going up is much healthier than what we saw in maybe 2017, mostly driven by the retail market or the individuals. So now, it’s because they need to set up the fund, they need to set up the portfolio and convince the people and then like, pass all the regulation and then they comply is to say, “I want to buy a Bitcoin Internet portfolio.” And then like maybe after one week or two, and then like they say, “Oh I profit, I want to sell that.” That would not be the mentality of the institutional side.
00:21:14:15 – 00:21:56:29
Richard Carthon: Right. And you know, you bring up a really good point where I think a lot of stability started to come from prices. These institutional players aren’t trying to necessarily day trade a significant portion of the Bitcoin that they’re buying, they’re hotelling. And so, with hotelling, holding on for dear life, just holding on for even a set period of time, whether it’s months or years. If that’s your long term strategy, that means scarcity has to happen. And of course, with scarcity, that means that prices drive up. And then I think the other part of it too, and again, everyone listening, this is not financial advice, this is my own observation is, you know, as you start to see more and more money in Bitcoin, prices rise. We then start to see alt season, right?
00:21:57:01 – 00:22:47:13
Richard Carthon: We start to see more money starting to pore into the other alternative coins because they’re like, Okay, I can’t necessarily afford 20 to 25,000 dollar Bitcoin, but Ripple at fifty cents looks really appetizing or Ethereum at $600 looks good or Litecoin at $80 looks really good or they start looking at some of these other ones and they’re like, Okay, here’s how I can get involved. And before they even, of course, do their own research, do whatever, is this, how do I get involved in this space? And then that’s when I think we really start to see some things start to catapult and some opportunities really start to line up, which is why, again, you owning an exchange, AAX and being a part of that is good timing. As we head into, I think this next decade, a lot more people are going to want to be getting involved in this space and having a means at which to onboard and get people to be able to purchase these things is an ideal spot to be in.
00:22:48:15 – 00:24:20:18
Thor Chang: Yeah, it’s very exciting to see how the market changed and then how the market is going right now. I think, even though the market is going really crazy right now, I think like, it’s just started. We also have to remind the markets and also remind the investors that like every time when there is a boom of the market, then there will be a lot of new assets and then like, new Cryptos coming up. But I think like this time it’s a little bit different, it’s not like 2017, but the boom is driven by ICO and then like you see a lot of like that new Crypto coming out and then like the people and then like tracing for the next Ethereum or like the next maybe like hundred times a profit on that. But this time I think is more rational and then like driven by the institutional side, their focus still will be like the major digital assets. They’re very careful to put the asset in the portfolio. So like, they’re a very good indicator that like, if you ask like, what asset you should put in your portfolio, maybe you just look at what grayscale they’re putting in their portfolio for their trust fund and then they can see it maybe less than 10 to each of the assets.
00:24:21:01 – 00:24:21:16
Richard Carthon: Yeah.
00:24:21:18 – 00:25:20:12
Thor Chang: These are the saver ones that like you see that the institutions they are buying. So, you will see that like now there are some major assets that the price is going up. If you see that like some Crypto and some digital assets, they are not catching up and then you probably see like they’re not getting the money from the institution, all the attention from that. Or like maybe why they’re not getting the attention. Maybe not really like they’re not getting the attention from the institutions, but the institutions they cannot invest into that because like, I was a licensed person in Hong Kong to serve the financial markets. I know that like they want to invest in a fund, it’s very, very strict for compliance and to pass, so, let me invest into the new things.
00:25:20:23 – 00:25:21:08
Richard Carthon: Yeah.
00:25:21:10 – 00:26:26:11
Thor Chang: So, I think investing in Bitcoin is already a very big topic to pass the internal compliance. I think like if you ask them, Okay well, can I put some money into Monero or can I put some money in another asset? And then like the compliance team or like the reversal for what is this new asset class? Is it recognized by the regulator? We see like that most people with money trading Bitcoin or maybe Ethereum. And then like we need more legal opinions, we need more review. So like, that actually takes a longer process for that. So, now because like for them to pass the internal review that like, oh you want to trade Bitcoin and you see like all these banks and all these different issues. If you say we cannot say why they can’t trade, right? So, it’s very easy, but it’s just about why they put Bitcoin or Ethereum into their portfolio before the other assets, where it would be a bit more challenging or maybe take a longer time.
00:26:26:13 – 00:27:25:28
Richard Carthon: But just like you said, as demand increases, as you start getting more and more people asking enough times, it changes, right? So, back when the last 2017 boom happened and people we’re trying to get on Bitcoin, a lot of people were like, Well, what is that? And whatnot. You didn’t have access. Now you fast forward to 2020 and now PayPal allows you to buy Crypto, now you have JP Morgan looking at different ways to get involved in the space, now you see all these other ways that you have faster ways to be able to get access. And so, as access increases, as demand increases, you’ll see a lot more opportunities for some of these lesser known Cryptos to be able to merge and be one of these new top runners, but of course, that is yet to be seen. But again, just like you said, exciting times in this space. I really do appreciate you spending some time with us, explaining all this, giving your insights on everything, but what is a final thought that you want to leave with all of our listeners here today?
00:27:27:21 – 00:28:30:09
Thor Chan: Come to try AAX, our platform. We are offering a lot of different online offering infrastructure and carefully selected small pairs on the platform. And we can trade perpetual contracts for the major Cryptocurrency aspects. I think like for AAX, we are serving both retail uses and other institutional uses. But in retail uses, we’re offering a very easy to use platform and very fast on and offramp infrastructure. So, we have users all over the world to put their local currencies and change it into the Crypto in a very short period of time. And for the institutional uses, actually like, they are very happy with the connectivity that we are offering, very low agency and high stability. And that’s the thing we want to talk about, AAX.
00:28:32:03 – 00:28:39:05
Richard Carthon: Awesome. Well, I definitely appreciate that. What are some ways that people can learn more about AAX and also connect with you?
00:28:40:26 – 00:28:46:27
Thor Chan: Just check out AAX.com and then like you find more about our products and our services.
00:28:47:21 – 00:28:52:28
Richard Carthon: Awesome. Well, again, I really do appreciate your time today. And for everyone listening, Stay Crypto Current.
Crypto Current will be guiding all of you who are new to the cryptocurrency world to becoming a cryptocurrency and blockchain expert. Crypto Current was founded to give access to information to everyone on current events occurring in cryptocurrency and blockchain in a digestible way. Since its creation, we have created content that impacted thousands of people through its podcast, blog, and social media.