BitMEX, one of the world’s biggest bitcoin platforms, hires former Hong Kong markets watchdog to oversee operations

One of the world’s biggest cryptocurrency trading platforms, the Bitcoin Mercantile Exchange (BitMEX), has recruited a Hong Kong regulatory veteran to work with watchdogs worldwide to develop a proper set of rules to help the industry grow.

BitMEX appointed Angelina Kwan on Tuesday to become its chief operating officer with immediate effective, overseeing the overall development of the company.

Kwan, a certified public accountant, served as managing director and head of regulatory compliance for Hong Kong Exchanges and Clearing from January 2015 until the end of August this year. Previously, she was a director at the Securities and Futures Commission between 1998 and 2006, covering enforcement and market supervision.

Between the two regulatory roles, she worked at brokerage firms including Reorient and CLSA.

“I hope my previous experience will help in establishing a constructive dialogue with the various regulatory authorities around the world over the development of regulation in the cryptocurrency industry,” she said in a telephone interview on Tuesday.

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BitMEX only handles bitcoin, which since its creation in 2009 has become the best-known of the many cryptocurrencies in the market. It uses encryption and a blockchain transaction database, enabling the fast and anonymous transfer of funds without a centralised payment system.

The platform made headlines after it recently agreed to pay US$600,000 a month to rent office space in Hong Kong’s Cheung Kong Center, a record at HK$225 (US$29) per square foot. BitMEX’s new offices will make it a neighbour of the SFC, which is in the same building.

China and South Korea banned digital coin sales last year while Hong Kong and many other markets are yet to fully regulate cryptocurrency, leaving exchange platforms unburdened by a strict set of rules.

Hong Kong Monetary Authority chief executive Norman Chan Tak-lam last month warned that trading in virtual currencies carries high risks because the de facto central bank does not consider it a “currency”. The SFC, the city’s investment regulator, has warned many times about the dangers of fraud and market manipulation posed by cryptocurrencies.

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Kwan said the lax regulation has led to a lack of the confidence among investors who might otherwise trade on a virtual-currency platform. BitMEX is wholly owned and operated by HDR Global Trading, which was set up in the Seychelles where the regulatory environment is seen as more friendly.

“The US has introduced regulations over cryptocurrency [and that has led to] futures products trading at the CME Group and the CBOT,” she said, referring to two of the biggest American exchanges.

“This shows that a regulatory authority can help to develop a new industry. I hope that in my new role at BitMEX, a dialogue can be started with various regulatory authorities on how to develop regulations that can protect investors while at the same time helping the industry to further develop,” she said.

Arthur Hayes, co-founder and chief executive of BitMEX, said in a statement: “I believe Angelina’s decision to join us is a signal that the global markets are shifting focus to the rapidly-expanding domain of crypto-coins.

“Angelina’s vast experience in regulation, trading platforms, business development, restructuring, and investor and stakeholder relations will be pivotal as we continue the push towards mainstream cryptocurrency adoption and broaden our community.”

US$600,000 monthly office rent at Cheung Kong Center is a breeze for digital currency exchange BitMEX

Kwan first became interested in bitcoin when she consulted for another cryptocurrency platform in 2013. She received a few bitcoin in return for her services when the price was at US$800. It has now risen eightfold to US$6,540 as of Tuesday.

“What I thought was just a trend has become an interesting asset class as bitcoin and other cryptocurrencies have developed over the last few years” she said.

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She also appreciates BitMEX’s efforts to promote gender equity. Kwan is a Hong Kong government-appointed member of the Women’s Commission and has been active her duty promoting women in the workplace.

“The cryptocurrency markets present an exciting new opportunity for women to get involved in the intersection of finance and technology, two fields in which they are chronically under-represented. BitMEX has made its commitment to meritocracy clear, and is sending the message that women with deep backgrounds in finance and business can execute at the highest level within cryptocurrency companies,” Kwan said.