New cryptocurrency exchange to run on NASDAQ infrastructure
DX Exchange will be a NASDAQ-powered cryptocurrency exchange. But what does that actually mean?
A soon to be launched cryptocurrency exchange, DX Exchange, is set to launch on NASDAQ infrastructure, said its CEO Daniel Skowronski in a recent interview.
The benefits of this are threefold he explained: "The brand name, the technology and the regulations."
The brand name carries a lot of weight, helped along by the accompanying technology and regulatory framework. Working with NASDAQ, Skowronski says, means meeting the highest regulatory standards which should help avoid some of the more common errors plaguing other cryptocurrency exchanges, such as fake volumes.
The exchange is also working on getting licensed. It recently acquired an Estonian licence and a Cypriot market maker licence, and is currently in talks to get a US licence. However, at the time of launch US customers are expected to be barred from the exchange.
It's initially expected to buy and sell just the top coins, including bitcoin, Bitcoin Cash, Ethereum and Litecoin, eventually expanding into a range of 20 to 30 other coins.
"We are supporting blockchain technology. And the way we can help this ecosystem to progress is by vetting the tokens and making sure the good ones are promoted. We are not going to list coins, just because they pay us. Those who are worthy – will be listed," Skowronski said.
New coins will go through several vetting stages, he explained. The first step is the initial application, the second is an interview and the third is a legal opinion by the in-house team, and due diligence in inspecting the team and the whitepaper.
This is probably similar to most large exchanges. Coinbase's GDAX exchange has its own strict rubric for judging whether or not to list a coin, and the despite having a huge amount of coins listed, Binance's co-founder has said that 97% of applicants are rejected.
Other exchanges such as Cryptopia take a different tack and try to offer coins that can't be found anywhere else, arguing that there's genuine customer demand for obscure tokens, and that exchanges should stick to executing trades, rather than being judge and jury.
DX Exchange's closest equivalent on the market might be Robinhood. Just like Robinhood, it won't be charging any commission fees on trades, but will instead operate on a subscription model, charging traders a monthly fee of around 10 euros.
It's not an optional "premium membership" style fee the way Robinhood's is, but customers might still find it well worthwhile in order to access the trading tools offered by DX, as well as the sense of security.
"People are looking for security and safety. We’re trying to be very clear so that the customers will know what they are getting," Skowronski says. Part of this will come through use of NASDAQ's security frameworks. However, work on these is still ongoing and NASDAQ is actually looking at Genesis and other established cryptocurrency exchanges for its cybersecurity cues.
A NASDAQ-powered cryptocurrency exchange sounds impressive, and zero fees sounds tempting, but until it launches it's not possible to say what this really means for its quality compared to other exchanges.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO