The entrepreneur uses $ 67 million in savings to acquire a cryptocurrency exchange
Earlier this month, it was announced that Eric Cheng, an entrepreneur from Singapore, had been saving his life and selling his real estate, including two Rolls Royce, Lamborghini, Ferrari and a Porsche, for a wholly-owned investment in a Japanese cryptocurrency exchange called BitTrade acquire.
Why Cheng was willing to take the risk
Less than a week ago, Bithumb, South Korea’s largest cryptocurrency exchange, suffered a security breach and lost more than $ 30 million in client funds stored in digital assets such as Bitcoin and Ethereum. The Bithumb team has officially announced that the company is fully equipping its customers with corporate funds stored in cryptocurrencies worth $ 450 million in June 2018.
However, with small cryptocurrency exchanges, it is difficult to cover losses incurred in hacker attacks, especially if the hacked amount is greater than the company’s existing capital. For example, the largest cryptocurrency swap in Japan, known as the Coincheck, lost $ 450 million to NEM in a recent hacker attack, and the failure of repayment by investors resulted in the stock exchange filing for bankruptcy.
There is therefore a risk of acquiring a cryptocurrency exchange despite high profit margins, since the exchange requires very experienced and talented developers, security experts and IT specialists. Even Coincheck, formerly the largest stock exchange in Japan, acknowledged that the hack was caused by the company’s lack of security experts.
Cheng, who spent all of his $ 67 million worth of savings and then some to acquire BitTrade, said he does not regret taking the risk and is satisfied with his acquisition.
“The cryptocurrency industry is growing exponentially, so a well-regulated and licensed outfit is the key to meeting growing demand, and with this Japanese FSA-licensed platform, I’ll work closely with regulators to scale that platform worldwide,” he said Cheng.
It is likely that Cheng aggressively pushed ahead with its plans to buy BitTrade because of the regulatory status of the exchange. BitTrade remains one of the dozens of cryptocurrency exchanges in Japan licensed and approved by the Financial Services Agency (FSA), and the government approval process to act as a Digital Asset Exchange is expensive and difficult.
Kraken Daily Market Report for 22.06.2018
KRAKEN DIGITAL ASSET EXCHANGE
$250M traded across all markets today