Kenneth Tan is an experienced serial entrepreneur, currently serving as the Co-founder and CTO of CEZEX Digital Asset Exchange and Katalyse, a tokenization technology platform that to processes client onboarding and listing of security tokens. He is also a prolific blockchain writer, regularly writing for well-known publications like Hackernoon and The Mission, and also runs his own crypto publication at Cryptodigestnews.
CEZEX is based in the Philippines and is Asia's first licensed digital assets exchange platform for asset-backed securities tokens, allowing for the digitalization/tokenization and trading of any traditional asset classes.
How is the CEZEX exchange regulated and what core services are offered?
CEZEX comprises a unified platform for traders, brokers and issuers to list and trade a fully regulated and compliant market exchange. We are operating a regulated marketplace where companies and projects can list asset-backed tokens and investors can trade these security tokens with other investors in a secondary market where security and transparency are safeguarded by CEZEX.
For trading, CEZEX is offering 3 kinds of asset-types: (i) derivatives, (ii) currencies, and (iii) security tokens (asset-backed digital token that represents the ownership of an asset). In essence, CEZEX is a next-generation exchange market for direct trading in digital assets.
CEZEX obtained a license and are authorized to operate a “Security Token and Asset-Backed Token Exchange” as issued by CEZA, Cagayan Economic Zone Authority, the Philippine government controlled corporation tasked to manage and supervise the Cagayan semi-autonomous region. CEZA has set up a Self-Regulatory Organization (called ABACA) to oversee the governance of digital assets for the region.
Under the license, CEZEX is permitted to allow for trading of any asset class (securities, commodities, derivatives, currencies, metals, etc.). The activities are only permissible for off-shore activities wherein the buyer and seller are outside of the Philippines.
What is the current sentiment in Asia for security tokens (digital securities)? Is there a demand for a secondary market?
The exponential growth in ICOs, as well as the speculative nature of ICOs (over 50% of ICO projects have failed to raise funds or are no longer in operations), have led to regulators paying close attention to the digital asset space leading to a decline of the entire sector. However since the beginning of Q1 this year, we are seeing a gradual uptick in the market, which is an early signal that a lot of money is flowing back into the space and that the market for secondary trading is gradually rebounding.
With increasingly more regulatory clarity in place (also here in Asia) it is expected that increasingly more market participants will be involved in building the ecosystem (market makers, traders, hedge funds, market research, financial & legal advisors), and as such more demand is expected for an institutionalized market infrastructure to put in place to facilitate professional trading environments both for cryptocurrencies and for security tokens.
When do you anticipate trading of security tokens will be available on the exchange?
Our team has dedicated a lot of effort and resources in developing a comprehensive ecosystem enabling an integrated solution for digitalizing assets from tokenization (issuance), listing, treasury management and trading. We have been testing in beta mode earlier this year to smoothen and optimize the workflow, and are now fully-ready to manage and operate the exchange for listing and trading.
CEZEX has a strong pipeline of deal flow from applicant companies that would like to be listed on the exchange. The first batch of security tokens have been planned to be listed by June this year.
What is the criteria for security tokens to be listed on CEZEX? How long will the listing process take?
In principle, all companies (public / privately owned, investment funds, etc.) that have raised capital through regulated asset-backed security token offerings are eligible to list on CEZEX, as long as the company meets the listing conditions. CEZEX will validate and accept applications based on approval of its customer due diligence requirements.
The listing process can take up to 1-2 months depending on the amount of work required to get the documentation done properly.
What plans or goals can you share for the future?
CEZEX aims to create a more structured market for listing and trading digital assets, as well as to continue to support the digital asset industry into a more professional and sustainable sector. CEZEX aims to bridge the gap between traditional financial markets and cryptocurrency markets by providing market participants access to tokenized markets through the operation of a regulated market.
We believe a highly liquid, global market for security tokens could potentially be the biggest shift in asset exchange and asset investing. Imagine if every investable asset was to be represented by security tokens (as in theory any type of asset class can be tokenized), then the market for securitized token assets can potentially open up trillions of dollars in liquidity. The global real estate market, one of the best use cases for security tokens is worth over USD $200 trillion alone, and according to Bloomberg, the global stock market is worth roughly around USD $80 trillion.