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The path to Compliance for Web3 exchanges: Trust and Innovation behind 250,000 users
Web3 Compliance Expert Shares Exchange Operation Insights
As the compliance officer of a virtual asset compliance exchange, an industry expert believes that "trust" is the key word. The exchange he works for has accumulated 250,000 registered users in the past year, with a cumulative trading volume exceeding 500 billion HKD, becoming the largest licensed exchange in Hong Kong. The exchange has obtained virtual asset service licenses in multiple regions around the world, with the goal of obtaining licenses in Europe and the Middle East within the next year.
The expert introduced the challenges faced in the process of applying for licenses and actual operations. He pointed out that compliance management in the Web3 space requires a completely new perspective, seeking a balance between pursuing customer profits and protecting customers. The primary principle of the compliance department is "business-friendly, while maintaining the bottom line". Compared to traditional finance, the Web3 world places greater emphasis on speed, adopting a strategy of "act first, evaluate later".
Finding a balance between regulation and innovation is a challenge. As a licensed financial institution, the exchange tends to adopt a more compliance-focused approach. The compliance team needs to weigh speed and security, finding a balance between rapidly launching new products and ensuring thorough testing.
The expert also introduced the structure and responsibilities of the Compliance team. The team's work is divided into group level and local level, covering business in multiple countries and regions. The team is mainly divided into two areas: AML and Regulation, and is further segmented based on the needs of different regions.
Communication with regulatory authorities is an important part of daily work. The exchange needs to continuously communicate with regulatory authorities, especially when launching new products, and it is necessary to provide a complete plan, including the impact on customers, potential risks, and so on. This communication is not only to obtain regulatory approval but also a process of mutual learning.
Looking to the future, the expert believes that the focus for the next year will include improving the implementation of existing policies to ensure there is no gap between design effectiveness and operational effectiveness. Additionally, they are actively exploring how to connect the exchange with other markets and how to use blockchain technology to improve the pain points in traditional finance.
Finally, the expert stated that their goal is to become the benchmark of the industry, not only to be compliant verbally, but to truly integrate compliance awareness into the company culture. He hopes that in the future, everyone will consciously adhere to compliance standards, thereby providing better service to clients.