Hugo Renaudin is bullish on cryptocurrency, and by tapping his knowledge of traditional markets he hopes to do his part to improve the trading environment in this new era.
Mr. Renaudin is the CEO of LGO Markets, a digital asset trading platform dedicated to institutional clients. Currently in soft launch with select clients, the platform is scheduled to go fully live early in 2019. LGO Markets will bring the professionalism of traditional exchanges, which he believes is lacking among early cryptocurrency exchanges, and combine it with added services made possible by blockchain technology.
“We serve as bridge between institutional investors and the cryptocurrency markets,” Mr. Renaudin began. “We’re a cryptocurrency exchange for institutional investors.”
Just like NASDAQ, LGO Markets does not hold client funds, Mr. Renaudin explained. That allows institutions to trade with no counterparty risk. It’s an important step for entities managing other people’s money as it removes non-financial risks to the sector.
That security sits in stark difference to most cryptocurrency exchanges which Mr. Renaudin likened to going to a casino. Go and play but when it comes time to cash out there’s risk to the house. And it’s worse with exchanges as the transaction clearance process is a black box.
“That’s the exact opposite of what institutional investors are looking for,” Mr. Renaudin said.
Strong infrastructure is what institutional investors require and LGO Markets provides it, Mr. Renaudin said. They have partnered with a regulated and established custodian to store fiat currencies while digital assets are stored on clients’ own hardware wallets which remain in the client’s possession independent of the LGO platform. Those wallets require two of three keyholders to complete a transaction. The client also controls a brokerage account with a fiat custodian.
LGO Markets is applying for broker-dealer and alternative trading system licenses in addition to a BitLicense in New York State.
The market is ready for security tokens, Mr. Renaudin said. Because they essentially serve as a medium for exchange, whether it be for corporate debt, real estate or shares, existing regulations suffice. Security tokens will serve as a new representation of value in a blockchain-based system that allows almost anything of value to be exchanged, which is a vast improvement over early ICOs.
“Coins were being created with no utility whatsoever,” Mr. Renaudin said. “Those kinds of ICOs are gone. ICOs like the ones we saw in 2017 won’t be seen again.”
Mr. Renaudin envisions LGO Markets being much more than a cryptocurrency exchange. Over time he plans on building a tokenized version of a traditional asset exchange.
But for now the task is to build a better cryptocurrency exchange, which is a needed step for a market nowhere near fulfilling its potential.
“The job of an exchange is to bring clients together and to execute transactions in quick fashion,” Mr. Renaudin said. “Most cryptocurrency exchanges don’t do the second half of that.”
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