Exclusive Interview With Equos
COO at Equos — Neil Sheppard
- Hi Neil, happy to have you with us today. Tell us about your background in the financial services industry at Nomura and what led to your transition over into the digital asset space.
Thank you for having me. I joined Diginex, the parent company of EQUOS, last year after spending 15+ years in banking. My role as COO, Financial Services encompasses product design, research, and implementation of the full suite of our offering — exchange, trading, custody, and asset management.
I’d previously worked with Diginex Founder Miles Pelham and Diginex CEO Richard Byworth during my banking days and witnessed the transition they had made into the world of digital assets. I was drawn into the industry by the opportunity to help build a business that was creating impactful and innovative products.
Digital assets and the underlying technology that powers them are going to transform the traditional financial services industry and bring about real change, it’s great to be part of that.
2. How important is it that Equos is the first cryptocurrency exchange to be a part of a company publicly traded in the United States going to be for the future of not only your company but the industry as a whole? What was the driving factor that led to this momentous feat?
We see our Nasdaq listing as an essential part of bringing much needed trust and credibility to the industry. Diginex is the first virtual currency company that the SEC has approved for listing on a north American exchange and is a validation of the platform and approach that we have created. Being a publicly listed company on a US exchange is the highest bar in terms of transparency and governance, offering a high degree of assurance for both customers and shareholders. We see ourselves as the first, but not the last. We expect many other firms to follow suit with a listing in the coming years.
3. What do you think is the biggest upcoming challenge for Equos? How does Equos plan to stay ahead of it?
The biggest challenge, not just for EQUOS, but for the industry as a whole is adoption. More specifically, adoption by mainstream financial institutions. We believe that for digital assets to be truly mainstream we need adoption rates to increase. We have started to see this, but we have some way to go.
The way we are tackling this is through education and engagement with the traditional industry. We know from working in this space in the past that these types of customers need more than a trading platform, they are looking for infrastructure that helps them manage assets from best execution of trades, to risk management, to custody of the assets. This ecosystem approach is what we have tried to create at Diginex.
Another key challenge is the regulatory environment, which is constantly evolving. We believe that it is crucial to actively engage with regulators especially when designing innovative product.
4. What differentiates the Equos Exchange from the many other exchanges in the over-saturated digital asset industry?
What was clear to us when we began to build EQUOS is that we need to be able to appeal to those who are truly comfortable in the digital space as well as those for whom this is somewhat still new. We wanted to make EQUOS comfortable for both. We did not want to make ourselves truly digital only platform, nor did we want to only appeal to those that still traded or accounted only in fiat.
Just one example of how we do this is, is our approach to how our users accounts are managed. Effectively a user can determine whether or not they wish to have their account denominated in USD or USDC, our chosen settlement stable coin for the platform. For those that choose an account denominated in US dollars, effectively we hold and manage their account in that risk currency. The same is then said for those that choose to manage their account in the digital currency USDC.
One of the key arguments for the benefits of digital assets is a reduction in the friction caused by trading using traditional financial services methods, it seemed odd to us to include this friction in our platform when considering our design. In addition, one of the second key arguments behind the adoption of digital assets is improved liquidity and again it felt odd to segregate our markets and create an additional spot pair, for example for Bitcoin versus US dollars, as well as Bitcoin versus USDC.
Now most of the competing platforms, they’ve consolidated themselves to one or the other, yet in order to execute there you’d invariably have to step through the process of getting your assets into the correct underlying base currency, at your own cost.
Here we allow you to still manage your assets in the currency of your choice from a risk perspective, but we allow all trading accounts to be able to trade and execute on the one single pair.
Effectively the trading is agnostic as to whether or not the account is held in USD or USDC, so we’ve managed to pool the liquidity and reduce friction as well as maintaining the customer’s choice as to how they want to hold their assets on platform in the denomination of their choice.
We effectively manage that fiat on ramp and off ramp for all customers, without adding to complexity or cost from their perspective.
5. How do you envision the digital asset industry and more specifically Diginex benefiting and disrupting traditional financial institutions and services in the foreseeable future?
If we look at the digital securities as one example. This is one area that we expect to see traditional players joining soon. The reason for this, is that the base infrastructure for digital securities is the same as traditional capital markets but with more benefits.
For example, in EQUOS Capital our capital markets business we create deals that are available in either traditional long form contracts or as digital securities.
The way we help those from the traditional space to get comfortable with these new structures is to give them both the paper and digital option.
Investors in these deals have the option to move from one format to the other during the life of the transaction. There is no requirement or need to be in a digital format, it’s not an exclusivity we demand but it’s an option for those keen to adopt the benefits that technology brings, notably around possible secondary market liquidity, on-chain data and smart contract automated execution, as well as customer and cap table management.
Those new to the space that do take up the digital asset opportunity can feel protected and confident in the safety net an option to go back to paper provides.
In many ways, this process future proofs all the deals we are involved in as the adoption rate increases and the regulatory framework governing digital assets and particularly digital securities around the world evolves.
6. What is the most glaring issue with the current functionality and adoption of crypto? What needs to be improved?
This is simple — reputation. Hacks, regulatory mishaps or even criminal investigations are extremely well reported. This creates a perception to the wider investment community that we are part of an industry of bad actors, which is simply not true. We must do better and come together an industry to educate potential customers about what they should be looking for when choosing a platform to transact with. Of course, this creates an opportunity for those players who can demonstrate adherence to regulatory compliance and put the safety of customers and their assets above all else.
7. How has Equos prioritized safety and security for the most seamless of functionality for even the most novice users?
Security is something we have thought about very carefully. There are a number of measures we have put in place to ensure that anyone who transacts on EQUOS does so with the peace of mind that our platform is secure, and their assets are safe. These include securing assets in cold storage, mandating traders to use two factor authentication to login to the platform, systems monitoring, and staff training.
We have also implemented nine-levels of security protection so that should anyone try they would need to penetrate all nine levels to succeed. In addition, we have a large security team who have backgrounds in financial technology and government defense who monitor for the latest novel attempts of bad actors penetrating systems so we can constantly improve our systems.
8. What parallels can you draw from your work in the equity sector to the crypto market?
Similar to banking it is about understanding client needs and building products to service them. In traditional finance creating investment products specifically packaged to address the needs of a specific client segment, an example of this could be derivative-based structured products sold via distributors such as private banks for high net worth clients who are looking for higher return generating investments.
Including digital assets and derivatives in products like these will be a mainstay of this industry in the future. These types of products will cement crypto as an asset class in its own right.
9. Can you speak about the team at Equos and how you have been able to maintain relevancy and growth in such turbulent conditions?
EQUOS is built by a global community of traders, developers, and disruptors. Our team has some of the leading minds from the traditional and digital financial services industry, who between them have decades of experience in structuring, trading, and ensuring regulatory adherence.
For us, we believe we stay relevant by having a constant dialogue with customers and the team to create a community of forward thinkers that want to help not just EQUOS but the industry thrive.
Disclosure: The views and opinions expressed here are solely those of the Stacking Ventures team. Opinions provided are subject to change and do not constistute as financial advice in any way whatsoever. Every investment and trade involves risk. You should conduct your own research when making an investment decision and only invest what you are willing to lose. #Sponsored