[Herald Interview] Gopax seeks to win back public trust in cryptocurrency
Up-and-coming exchange aims to change game with global network of comprehensive trade data
Published : May 22, 2018 - 13:46
Updated : May 23, 2018 - 12:31
Four cryptocurrency exchanges -- Upbit, Bithumb, Coinone and Korbit -- have dominated South Korean trades on the highly volatile market, riding the bandwagon of futuristic technology and a wave of speculation.
But with the volatile market now facing a waning public trust, cryptocurrency exchange Gopax, through its six-month operation, is seeking to become a game-changer by assuring the investors of the cryptocurrency trades here.
Behind Gopax’s drive are the global ties that it has been forming, Lee Jun-haeng, co-founder and chief executive of Gopax operator Streami, told The Korea Herald.
Lee Jun-haeng, CEO of Streami, cryptocurrency exchange Gopax operator (Park Hyun-koo/The Korea Herald)
Gopax is the only Korean exchange partner out of some 20 that formed a partnership in 2016 to build the Cryptocurrency Data Feed, which went online in March this year.
“Now our efforts from the past seem to be bearing fruit,” Lee said.
Cryptocurrency Data Feed is built by Atlanta-headquartered InterContinental Exchange, provider of electronic marketplace infrastructure to New York Stock Exchange and other capital markets. It is powered by Bitcoin blockchain tech company Blockstream. According to ICE, some 65 percent of the global crypto trading volume, coming from some 20 exchanges, is recorded in the feed.
Through the feed, Lee said he could address what he had found problematic -- overflowing information that stands in the way of appropriately rating the value of digital assets.
“We had run a service that helps investors discover crypto prices through discussion, analysis and voting,” Lee said, referring to now-defunct crypto coin information service Cryptopic, launched by Streami in August 2017. “The way Cryptocurrency Data Feed works is different from Cryptopic, but they share one common goal: Crypto price discovery.”
Streami's Gopax also seeks to be the only Korean partner of Liquid, a sidechain solution by Blockstream designed to be pegged to the original Bitcoin blockchain.
When launched, the new digital ledger system is expected to reduce block confirmation time within participants, so that financial settlement could be made between exchanges in a much faster speed than in the original Bitcoin blockchain, according to Lee.
“(The partnership) enables a cross-border transfer of money in a standard required by the traditional financial sector,” Lee said. “But the gravity of this issue appears to have yet to be discovered by the public.”
Other notable memberships of Streami, Lee said, include Enterprise Ethereum Alliance and DCG Connect.
An interior view of Streami office in Seoul. (Park Hyun-koo/The Korea Herald)
To cope with growing negative perceptions, Gopax has moved to keep pace with local powerhouses for the sake of legitimacy.
The Financial Supervisory Service has mandated a cryptocurrency exchange to submit financial records by external auditors to the watchdog. It comes with conditions that the exchange, for two consecutive years, showed net worth at least 12 billion won ($11.1 million), net capital asset worth at least 7 billion won with liabilities exceeding 7 billion won, or net capital asset worth at least 7 billion won with over 300 employees. Operators of Bithumb, Korbit and Coinone are subject to the accounting regulation this year.
Despite not meeting any of the three criteria, Lee said he was considering submitting regulatory filings, under an external audit by Samil PricewaterhouseCoopers it named in April.
Streami was founded in July 2015. Gopax, launched in November 2017, is the latest form of Streami’s blockchain-related businesses.
Prior to Gopax existed Cryptopic, as well as remittance service StreamWire.
Streami’s remittance technology, leveraged by blockchain, has garnered global spotlight in its first two years. Venture capital firm Medici in July 2016 picked Streami as one of “top seven blockchain startups in Asia-Pacific region.” StreamWire in 2016 also sealed a multiparty partnership for cross-border money transfer with entities including Cambridge Center for Alternative Finance and Shinhan Bank.
But Streami ran into regulatory confusion between the government and a bank, which passed the buck to one another in terms of accountability for licensing the business here.
“We have spent about a year remaining idle,” said Lee, referring to the technology that would have in theory allowed transfer of funds and information through partnership with financial institutions. Streami has suspended its plan to launch StreamWire in Korea since 2017.
Formerly a consultant at McKinsey & Company, Lee said he first got to learn about cryptocurrency in November 2014, following a co-founder Kong Yeun-jin, who now serves as a chief technology officer of Streami.
By Son Ji-hyoung (firstname.lastname@example.org)
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