[Blockchain in SEA] Security Risks Lead to the Emergence of Digital Asset Custody Platform
[Blockchain in SEA]
51days ago

The full text is a total of 2314 words, expected to read 5 minutes.

Editors note: Regulators must take a stand on this payment token project. It will likely trigger a broader regulatory reflection and collaboration on other form of digital assets such as securities tokens.


Time: 07/27  16:00PM(GMT+7)

Wechat group: BlockChain-in-SEA

Guest: Alexandre Kech, Onchain Custodian CEO

Host: Andy Zheng, Beecast CEO



Andy Zheng: Good Afternoon, everyone! I am Andy Zheng, CEO of Beecast.

Welcome to the leading blockchain community media [Beecast] and join us with 5000+ communities & 1000000+ Beecasters in [Blockchain in SEA] to discuss blockchain technology and industry development.

This is the phase 29,

Topic: Security risks lead to the emergence of digital asset custody platform

Guest: Alexandre Kech, Onchain Custodian CEO


Alexandre Kech is Chief Executive Officer at Onchain Custodian, a Singapore-based digital asset custodian. Alex recently resigned from a comfortable job at a comfortable company to directly contribute to the tokenisation of economy and capital market which Alex believes will ultimately take place.

Alex has 20+ years of experience in the capital market industry. From global custody and asset servicing at the Bank of New York Mellon to data standardisation and Head of Securities & FX APAC at SWIFT, Alex has developed a strong post-trade industry leadership experience, extended in recent years to digital assets and blockchain.


Andy Zheng: Mr. Alexandre, as a senior practitioner with 20 years’ experience in the capital market, can you tell us a little about your career to date, and what made you move into the blockchain sector?

Mr. Alexandre: I am an ex-capital market player. I started my banking career in 1997 at the Bank of New York Mellon in the global custody business before moving in 2001 to SWIFT, the inter-FI messaging network, where I was always involved in the securities and foreign exchange (FX) business.

Did you know that more than 50% of the volumes of the payment infrastructure, SWIFT, is actually securities and FX clearing and settlement transactions?

I moved to Singapore in 2012 with SWIFT, to lead their regional standards department before becoming Head of Securities and FX for the Asia-Pacific region. In December last year, I joined Onchain Custodian (ONC) as the CEO and have been building the business of ONC since then with our amazing team.

I started working on blockchain and digital assets at SWIFT where I was leading proof of concepts and supporting traditional custodians in their understanding around digital assets.

When I had the opportunity to join ONC, I jumped at the chance, as I’ve become a strong believer in the tokenization of the economy and want to be part of it. I want to contribute my experience gained over the years at BNY Mellon and SWIFT to building the right custody infrastructures, best practices and standards to support the industry’s growth and sustainability, and on the back of that Onchain Custodian’s success.


Andy Zheng: Since the birth of digital assets and cryptocurrencies, security has been its biggest problem and concern. Onchain Custodian has recognized this and seized the opportunity presented in this new market. What services does Onchain Custodian provide for users as a digital asset custody platform?

Mr. Alexandre: Our mission is to solve the technological and operational challenge of managing private keys and access to token holdings.

We want our customers to be able to focus on their core business.

Our customers are from the institutional and qualified investor sectors, and they don’t want to  invest time, money and human resources on building and running a complex technological and operational environment to securely access and hold their digital assets. They want this handled by a respected third-party and they want this to seamlessly integrate with their business. That’s where we come in.

We provide a secure platform but also the compliance, transparency and neutrality often lacking in the crypto industry.

Our SAFE platform was launched in April 2019. It is a multi-signature cold storage, offering a very user-friendly interface, and enabling our customers to co-manage their assets or to delegate full custody of their assets to us.

Both models are always based on multi-approved instructions from clients, properly and securely authenticated on our platform, this way we – and our customers – each know where we stand.

We’ve been collecting feedback from our early adopters to evolve our platform step-by-step in line with customer expectations. We’re also working on our next version of the platform, which will complement cold storage, and offer a more agile and automated secure management of transactions and holdings.

Finally, we’re also building an ecosystem of partners to allow clients to benefit from a privileged access to trusted over the counter brokers through our escrow service, robust staking platforms, reliable lending and borrowing providers, efficient wealth management services, and so on.

Our objective is to focus on what we do best -custody - and partner with the best of other areas to provide value-added services to our customers.


Andy Zheng: It was reported recently that Tether created 5 billion USDT by mistake before burning them, causing people to question the decentralization of the blockchain. What do you think about this? How do you regain user confidence in the decentralization of blockchain?

Mr. Alexandre: Most blockchains are not (yet) decentralized enough, and for those that are, the weight of some participants is so big that it has an influence on token price and sometimes even on how the blockchain functions. This is not good.

I think governance of blockchain foundations and projects need to improve with more transparency on how tokens are issued, reserves managed, and so on. Here, again, custodians can play a role by providing neutral third-party visibility on foundations or project token reserve management, for example.

Li Jun from Ontology who, when we cooperated them as customers, described it best.

He said: “The Ontology Foundation has decided to appoint Onchain Custodian for the independent third-party custody of its crypto reserves.

“In addition to increasing transparency vis a vis our community, it will allow us to focus all our energy and resources on progressing the Ontology project, leaving the safekeeping of our assets to a strong team of professionals”.

This is spot on. Transparency, security and focus are key to the future and sustainability of our industry. Custodians have an important role to play in this.

We support exchanges, foundations, projects and their institutional or qualified investors with the secure and transparent management of the assets fueling the various blockchains.


Andy Zheng: The world's first US-regulated physical settlement bitcoin futures began testing on July 22. Does this mean that cryptocurrency has begun to integrate into mainstream finance? Can cryptocurrency change the deficiencies and loopholes of the traditional financial industry? Can you explain how?

Mr. Alexandre: It’s often been a historical evolution for assets, first traded as such, to then generate derivative products.

It does demonstrate a certain level of maturity of the asset, in this case bitcoin. Whether that means bitcoin is now integrated into mainstream finance is a stretch. We’re not there yet.

I think it will take at least two more years before we see mainstream players seriously trading and investing in bitcoin and other tokenized assets, but it’s not too far away.

To answer the second part of the question, I do think tokenized assets and cryptocurrencies can contribute to increasing transparency around transactions, as well as enabling payment methods and investment opportunities for individuals, or corporations that are not properly served today by banks and other traditional capital market players.

Tokenized assets can also contribute to solving liquidity and access challenges that some high-quality assets have today.

For example, many real estate or fine art investments, most corporate bond investments are limited to privileged and sophisticated investors. This is an option simply not available to retail investors, for example.

Tokenization, allows ownership and trading of fractions of such an asset and widens the investor and investment pool. Meaning others can take advantage of investment opportunities that were previously closed to them.


Andy Zheng: Encrypted digital currency is characterized by large fluctuations because the regulation of encrypted digital currency assets is not in place. If cryptocurrency has been unregulated, the market becomes a game of manipulation, and few people will consider the changes, technology and strength that these projects bring. But will strict supervision cause the market to be silent and affect the development of derivatives such as futures?

Mr. Alexandre: I don’t think regulation reduces volatility. What reduces volatility, in my view, is the maturity of an instrument type, its volumes both in terms of trading and users.

When you only have half a dozen so-called ‘whales’ being able to move the market, that is when heavy fluctuation of price is taking place. The more investors there will be the more stable the market will become. The profusion of exchanges does not help either. That will hopefully change in the coming years.

As far as manipulation is concerned, regulation can definitely help, and it already does but often through the prism of consumer protection laws or AML/CFT only.

Practices like wash trading, and ‘pump and dump’ schemes, could be better fought with proper regulation.

The challenge here is due to the inherently global nature of crypto and blockchain, we need regulations that align across all countries, which is far from a reality today.

As it stands, either there is no regulation at all, or countries are implementing different rules. For a custodian like us, but for everyone really, it is not an easy environment to operate in.

I call for a coordination of regulators at FSB (Financial Stability Board), CPMI (Committee on Payments and Market Infrastructures) and IOSCO (International Organization of Securities Commissions) level to come up with a minimum common framework for all in collaboration with industry associations like the Global Digital Finance (GDF).

I think the much publicized ‘Libra’ project will help here. Regulators must take a stand on this payment token project. It will likely trigger a broader regulatory reflection and collaboration on other form of digital assets such as securities tokens.

If nothing else, now that many mainstream tech have joined the party through Libra, so to speak, people are starting to notice cryptocurrencies and ask questions about them a lot more. And that’s a good thing.


Andy Zheng: After experiencing the bull market and the oscillation period, what do you think about the market trend of the next market?

Mr. Alexandre: As a custodian, our role is not to comment on market trends or to advise on any investments.

My personal view though is that the market will stabilize upward over-time, reaching $400 billion cap by end of 2019 and moving up towards $800 billion by the end of 2020.

It will not only be fueled by bitcoin and the other top 10 coins, but also by other token projects which are being ran more and more professionally.

We will see the emergence of more tokenized assets investments like real estate and fine art, as well as the issuance of private and public equity in a tokenized form on the blockchain (on permissioned or public blockchain).

We’re talking about trillions of USD of potential investments that can be tokenized. It will take time but I am confident it is the trend and it will continue to be.


Andy Zheng: Has the Onchain Custodian team made any targeted adjustments in the quantification process? And what is the way to stop profit and stop loss?

Mr. Alexandre: If you are referring about our revenue projections and whether we had the need to adjust them based on market conditions, not yet.

We kicked off our project early 2019, at a time when the market was moving back to full-on-bull mode. Our projections were based on that, so we are happy that the trend upward is being confirmed.


Andy Zheng: As a senior preacher in the blockchain field, you may have come into contact with a lot of people in the industry. Are there anyone you admire, and why? Beecast currently covers 250 cities in 15 countries, 5,000 community nodes, 1 million users , and hopes to invite more big names to [Blockchain in SEA] to share the blockchain knowledge, promoting the development of the industry. In the blockchain industry of SEA, if you introduces one or two guests to be interviewed, who would you recommend to Beecast to share?

Mr. Alexandre: For sure, our company board chair Da Hongfei, who I admire for his leadership style and long-term vision. Without him as a found and chain of Onchain Custodian, I would probably not have joined the company.


I am a fan of Celsius’ Network CEO, Alex Mashinski. Beyond being a successful entrepreneur, Alex is a visionary. He’s straight forward, and easy to talk to.


Li Jun from Ontology is also someone I like to follow. I like his drive and ‘can-do’ attitude, always looking for the next opportunity and collaboration.


Two other entrepreneurs who inspired me to move from my comfortable job at SWIFT to a start-up are Galia Bernartzi, co-founder of Bancor and Maxine Ryan, Co-Founder and COO of Bitspark. These are two amazing and inspiring ladies in a heavily dominated male industry.



Andy Zheng:Beecast, SEA's leading blockchain community media, recently launched the ‘Blockchain in SEA’ series activities, visiting SEA's top blockchain funds, projects, exchanges, practitioners, and promoting global blockchain cooperation. Welcome more Friends to join. See you next time!


This article is reproduced only, does not constitute an investment opinion


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