Exclusive interview: In talks with CEO of the OKEx, Jay Hao

​Today, Jay Hao, the  CEO of one of the world’s leading cryptocurrency exchanges, OKEx, joins Fazzacto to  tell us more about OKEx and shares his expert views on the recent bitcoin price, cryptocurrency regulation etc.

1.Thank you for joining Fazzaco’s interview. Firstly, please give a brief introduction about you and your company.

Thank you very much for inviting me. My name is Jay Hao. I joined OKEx as CEO around two years ago and every day brings a new opportunity and challenge. As a leading cryptocurrency spot and derivatives exchange, OKEx is one of the world’s forerunners in the crypto industry. Founded in 2017, OKEx innovatively adopted blockchain technology to help rebuild the financial ecosystem of our generation. We strive to eliminate financial barriers, evolve the global economy, and change the world for the better. We are always working tirelessly to continuously improve the overall user experience to make cryptocurrency trading and investing available to everyone.

OKEx serves customers from more than 180 countries and regions. We have more than 1,000 staff worldwide and are continually growing. In fact, we expect a 100% increase in the total number of staff in two years serving customers from around the world.

Prior to OKEx, I had been working in the blockchain industry for several years, especially focused on producing blockchain-driven applications for live video streaming and mobile gaming. Before that, I worked for over 20 years in the semiconductor industry, developing a wide range of both technical skills in zero-tolerance to risk environments as well as accumulating extensive experience in products and management.

2. What sets OKEX apart from other exchanges in the Industry?

There are many qualities that make OKEx the platform of choice for millions of users. Beyond high liquidity, market depth and proven robust infrastructure and uptime even in times of unexpected market volatility, I would say the key factor that sets us apart is our commitment to innovation. OKEx has become a leading exchange thanks to our willingness to push beyond the functions of a regular exchange to cater to the needs of various types of participants in the cryptocurrency ecosystem.

Not only do we offer the fullest suite of derivative products on the market but we are continually improving the trading experience for our users by implementing new features such as real time settlement and Unified Account which include enhanced risk and capital management abilities previously unseen in the space. We also allow users to make a passive income through various initiatives including staking, lending, and Jumpstart Mining.

Also, user feedback is of paramount importance to us. I actually have another role besides CEO at OKEx, and that is Chief Customer Service Officer. I take this role very seriously and chat one on one with customers every day to find out what they need, what we are going well, how we can improve, and serve them better.

3. Currently, how big is the cryptocurrency market and what is your main target demographic?

The cryptocurrency market is growing exponentially with more than $1 trillion in overall market cap. This growth has traditionally been attributed to retail traders however, with recent moves in regulation particularly in the U.S., and the worsening economic conditions particularly regarding the rapid depreciation in fiat currencies, more and more institutional investors are moving into cryptocurrency, particularly bitcoin, and fueling this latest rally. 

We will continue to cater to the needs of our retail traders however, with this rising demand from institutional investors, we understand that they need more sophisticated products and risk management tools that allow them to maximize returns. Our new Unified Account management feature (also known as Portfolio Margin) allows advanced traders to select cross margin and isolated margin allowing them to offset their gains and losses against each other during risk calculation. So while our core focus remains on retail traders, we also aim to gain a larger slice of this demographic moving forward. 

4. Which country or area is the most active or promising to develop cryptocurrency?

We're seeing a growth in awareness and adoption of cryptocurrencies all around the world, however this must be accompanied with favorable regulation in order to make a country a sustainable market for cryptocurrency development. We see high demand in Eastern Europe and Asia, and within the European Union, which is taking a more favourable approach to crypto regulation compared to other jurisdictions. We will be expanding greatly to keep up with demand and looking to offer first-class services in all the markets in which we operate. 

5. Data shows that Estonia authority has revoked over 1000 cryptocurrency licenses in 2020,what are reasons behind this?

Estonia has been long-regarded as the blockchain nation and has incorporated this technology at a rapid pace. It is also known as a crypto-friendly nation traditionally. However, it is very hard to regulate a global asset as the rules and laws vary from jurisdiction to jurisdiction. I think that there are a few factors to play in this license revoking but mainly it is due to companies taking advantage of regulatory arbitrage, registering a company in Estonia with minimal or no connection to the country. Moreover, Estonia is in the EU and must comply with the rules that govern EU nations, this could also be behind this move.

6. What are to expect in cryptocurrency regulation in the future?

I believe that we will see increased regulation in the space in 2021. With a (more or less) established legal framework surrounding Bitcoin, regulators will spend plenty of time in 2021 examining further crypto projects and potentially holding more of them to account. With many vulnerabilities in the technology and investors losing money, the DeFi space is also likely to come under regulatory pressure. 

This input from regulators will be a welcome move as long as we don't begin to see regulatory over-reach such as the proposed FinCen rule for unhosted wallets that's being debated on currently. As long as regulators are willing to work with participants in the cryptocurrency space to establish sustainable regulation that does not crush innovation, their input will be good for the industry – and essential, if we are to see increased maturity, legitimacy, and the longevity of institutional demand.

7. What are the main factors driving the recent bitcoin price to soar?

I would say that we are looking at a sort of "perfect storm" for bitcoin adoption. The current situation with the pandemic and the dwindling global economy where the USD is losing value and the purchasing power of fiat currencies is weakening is forcing investors to seek alternative assets either for higher returns, as a hedge, or a more efficient store of value. We've seen positive changes in regulation particularly in the U.S. allowing banks to custody bitcoin and use blockchains and stablecoins for faster settlement, and we have seen a massive influx of interest from institutions such as MicroStrategy, Square, Galaxy, and Guggenheim adding BTC to their balance sheets.

8.Bitcoin has sometimes been referred to as “digital gold” and could be a good safe-haven investment. What is your opinion on the current market ?

I believe that it is becoming harder and harder for investors to ignore bitcoin. Now that there is sufficient regulation in the space and bitcoin has proven remarkable price resilience during the pandemic and also outperformed all other asset classes by a wide margin over the last decade more investors will start to hold a percentage of their portfolios in BTC. It's still very volatile as a new technology. Gold has centuries of trajectory whereas BTC has not yet 12 years. I am not sure if we can say with certainty that it has become a safe haven asset but, given the current market conditions, it is certainly an attractive alternative asset for investors. 

Perhaps one of the most compelling qualities of BTC is its built-in scarcity which makes it comparable to gold. However, bitcoin is actually much scarcer than gold so we could see as JPMorgan predicts, a large transfer of wealth from gold into BTC in the future.

9. According to you, what has changed for the cryptocurrency industry in 2020, and what to expect in 2021?

2020 was a year of incredible innovation, growth and maturity in the crypto industry. The inflating money supply in response to the pandemic really shone a light on cryptocurrency as a store of value and the growth of DeFi began to open investors' eyes to an alternative financial system that provides a level playing field for all. With some favorable regulation, the endorsement of some major names from macro investors like Paul Tudor Jones to companies like PayPal and Microstrategy, the industry has really taken off in earnest.

In 2021, I expect the momentum to continue. We will see increased institutional adoption, wider acceptance of cryptocurrencies in general and increased maturity of the space as more industry participants look to go public with IPOs. I think we can expect to see more and more adoption and use cases for blockchain technology across industries and increased growth in the DeFi sector, which will likely invite more regulation to protect investors.

Another trend that we will see more of in 2021 is the acceleration of CBDCs. China has already made great progress in this area and many other countries will look to follow the lead this year. All around, the case for cryptocurrency this year is very bullish indeed. In this latest cycle, OKEx has recorded a record-high in trading turnover as well as in the number of new signups on the platform. We're very optimistic about the outlook for the year ahead.