OKX Star: The industry is about to enter the “crypto finance stage.” #IndustryFinance

On October 10, 2024, OKX officially announced at the “Dubai’s New Choice: The Future of OKX and Blockchain Innovation” event held at the Museum of the Future in Dubai that it has become the world’s first cryptocurrency exchange platform to obtain a comprehensive operating license in the UAE.

This milestone not only marks OKX’s leading position in the global compliance process but also sets a new benchmark for the compliant development of the crypto industry, becoming a memorable chapter in the history of the industry. This achievement undoubtedly injects new vitality into the compliant operation of the global crypto market and provides valuable experience and insights for the future compliance path of the cryptocurrency industry.

OKX CEO Star delivered a keynote speech titled “Celebrating the OKX Dubai Launch” at the event, focusing on OKX’s commitment to global compliance, the OKX brand story and global development, product lines, Dubai’s new choice, and the development stages of the crypto industry. He emphasized the key role of compliance in promoting the development of the crypto industry, as well as OKX’s commitment to becoming a global compliance standard and the responsibilities it carries, while showcasing how OKX will continue to provide safer and more convenient crypto services for users in Dubai and around the world through technological innovation and strong products.

Here is the full text of Star’s speech:

Ladies and gentlemen, welcome to the OKX Dubai launch event. Today, we are very honored to have our users, partners, and regulatory bodies present to witness this important moment together.

1. OKX’s Commitment to Global Compliance

I would like to start by talking about compliance. To date, OKX has established a robust compliance program that covers both regulated and unregulated entities. We use the Financial Action Task Force (FATF) standards as the global compliance baseline, which includes user due diligence, politically exposed persons screening, user risk rating, and monitoring and reporting of suspicious activities. When we enter different global markets, such as Dubai, we fully comply with local regulatory requirements. Therefore, the comprehensive operating license granted to us by the Dubai regulatory authorities demonstrates great trust in the OKX team. I believe this is not just a publicity stunt, but an important responsibility we uphold to maintain high standards in the crypto industry; we do not want to disappoint our users and regulatory bodies.

Secondly, I will take a moment to quickly introduce OKX. We were founded in 2012, and we have come a long way over the past 12 years. Currently, we have over 15 global offices and more than 4,500 employees, and we have obtained licenses in many markets, including Dubai, Europe, the United States, Japan, and Singapore.

2. OKX’s Three Main Business Lines

We have three main business lines: OKX Simple, OKX Exchange, and OKX Web3. First, I believe most users are familiar with the OKX Exchange, which is a very powerful trading platform. We offer spot trading, leveraged trading, contract trading, and options trading all in one account, but we will provide different functionalities in different global markets based on local regulations.

Second, OKX Web3 is the gateway to the decentralized world. To date, we support hundreds of different blockchains, and we have built the technical infrastructure to monitor data across different chains in real-time and parse these data formats, thus creating our powerful heterogeneous multi-chain wallet, multi-chain decentralized exchange, multi-chain DeFi aggregator, and multi-chain NFT marketplace.

Third, OKX Simple is one of our new business strategies. We offer some basic products, such as buying and selling cryptocurrencies, but we will also launch some innovative features, such as Web3 payments and Web3 cards, which I will introduce in more detail later.

Next, I want to talk about OKX’s firm commitment to Dubai: we have established a regional headquarters in Dubai and will continue to invest in Dubai and expand our talent team. At the same time, we will continuously monitor and test the effectiveness of our compliance program, and we hope to make significant contributions to Dubai’s cryptocurrency community.

OKX provides a “tailored” comprehensive product portfolio for the Dubai market, which includes AED quick purchase options, AED order books, USDC and USDT order books. At the same time, we also offer derivative services for institutions and qualified investors.

In the future, we will launch many new plans and innovative products for institutional and retail users.

For institutional users, for example, first, we are collaborating with top global banks and asset management companies to adopt a third-party model that allows institutional users to deposit USD into our bank accounts. Second, we provide services for institutional users to deposit USD and receive USDC. Third, institutions can earn base APY through T-Bills. Fourth, we offer entity-level proof of reserves.

As we all know, we are one of the first global crypto exchanges to launch Proof of Reserve (POR). Currently, we are expanding POR to the local level. Therefore, in the coming months, we will launch entity-level proof of reserves. For example, our Dubai users and regulatory authorities will be able to clearly and transparently see the amount of user assets in our OKX system and the amount of assets held by OKX.

For retail users, we have also developed some plans. We are launching a self-custody wallet for retail users, equipped with compliance controls such as KYC transaction monitoring. This is a multi-signature wallet that users can create with one click after going through our registration process. The user’s private key will be generated based on a passkey, making the user experience very simple and easy. The product we are launching is called Smart Account. Based on the infrastructure of Smart Account, we will create many decentralized applications, such as Web3 payments and Web3 cards. We also hope to adopt a technology called ZK-KYC to share our KYC and wallet with other DApps, which means that all DApps integrated with our wallet can choose the types of users they wish to serve, and even choose the types of users they wish to exclude.

Until today, the user experience of OKX Web3 and MetaMask wallets is still not good enough, but we believe that if crypto finance truly wants to succeed, there needs to be significant innovation and transformation at the wallet level in the future.

4. The Crypto Finance Industry Will Enter a New Stage

Finally, I would like to take a few minutes to share our understanding of this industry.

It has been nearly 15 years since Satoshi Nakamoto created Bitcoin in 2009. Looking back over the past 15 years, the crypto industry has seen many developments. For example, first, the industry has successfully created crypto assets. Especially this year, the U.S. Securities and Exchange Commission also approved Bitcoin ETFs, making Bitcoin a very successful asset. Second, we can see that Ethereum technology, including Layer 1 and Layer 2 technologies, is becoming the infrastructure for decentralized application development. Third, we can see that some early-stage applications, such as AAVE, Compound, and Uniswap, have been very successful.

But people always ask one question: why has the adoption of cryptocurrency developed so slowly? Our understanding is that, first, there has been no popular on-chain entry currency in the past 15 years. Second, there are still many issues with the user experience and security of wallets. For example, current MetaMask or OKX Web3 wallets require users to safeguard their private keys for life. Finally, there is a lack of compliance infrastructure in on-chain financial infrastructure. If you want to launch some compliant financial applications on the blockchain, regulators will ask two basic questions: who are your users? How do you monitor and manage illegal activities on the platform? You might answer, “My users are OKX Web3 wallet users or MetaMask users,” but that is not enough.

In the past few years, we have seen these three issues beginning to be addressed. For example, there are many successful stablecoin companies, such as USDT and USDC. At the wallet level, we can see some leading industry companies, such as OKX and Coinbase. We have solutions to build a Web2 experience for self-custody wallets, allowing users not to worry about how to protect their private keys. In addition, the industry is also learning how to establish a sound compliance program. I believe that until today, many crypto companies have reached compliance standards that are on par with traditional finance, and even better than the banking industry.

Therefore, I believe that based on the development of this industry, the next few years can be termed the “crypto finance stage.” With the acquisition of licenses and compliance, industry companies can provide smooth fiat deposit and withdrawal services. The user experience of Web3 wallets and stablecoins will become increasingly popular. Therefore, the tokenization of real-world assets will enter a new stage. We will see every user being able to participate in decentralized finance (DeFi) using self-custody wallets. I love this phrase: “Not your key, Not your money,” but this does not mean there is no compliance. Regardless of how the crypto industry develops, it will ultimately be based on financial regulatory rules. We believe that in the coming years, the crypto finance industry will enter a new stage, where compliance and licensing will allow industry companies to provide seamless fiat in-and-out services. At that time, Web3 wallets and stablecoins will become increasingly popular.

Finally, I would like to conclude my speech with a tweet I posted earlier: “The ‘X’ in OKX represents infinite possibilities, and we believe that cryptocurrency will sweep the globe, with self-custody being the future.” Thank you.