Many crypto companies begin life focused on their products and individual customers. As the crypto markets gain institutional acceptance, these crypto players are now in the process of trying to morph into businesses with the capacity to service institutions. Amber Group has done things rather differently, being institutionally focused from Day One. By offering institutional grade services and security, it has been able to attract a global customer base. This gives it a unique view on trends in the markets. In this exclusive interview, CEO Michael Wu shares his views on where the crypto markets are heading, the challenges they face as well as what products are popular with its customers.
Q: What role is Amber Group playing in the institutionalization of the crypto markets?
A: Our role is to act as a bridge between institutions and the crypto markets, as the gateway to crypto finance.
Q: What kind of clients are you serving now, and how is this different from when you started?
A: We started as a six-person quant trading team out of Morgan Stanley. Initially, our primary focus was institutional clients like hedge funds and family offices. Over the past four years, Amber Group has scaled significantly and grown to be a top crypto finance platform servicing a global client base. We provide 24/7 global coverage for both institutional and individual clients, including institutions, hedge funds, token issuers, mining pools, exchanges and individuals. We help them access, trade and manage cryptocurrencies. Earlier this year, we secured a $100 million Series B from some leading global investors such as China Renaissance Group, Tiger Global Management and DCM. As a fast-growing unicorn valued over $1 billion, we are now in a better position to serve the growing crypto markets of institutions and individuals.
Q: What crypto market activity is particularly popular right now – yield enhancement products, exchanging, crypto staking or even crypto/fiat collateral and margin services?
A: I would say yield enhancement products. Yield Boost is one such that we added on our mobile crypto application Amber App earlier this year. It soon proved to be a game-changer winning the likes of many users. It offers investors (even non-professional traders) a safe and easy way to enhance their yield by monetizing their market view. Yield Boost allows users to customize their investment by choosing a currency pair, a maturity date and a strike price. Users can choose from a selection of tenors varying from days to months, catering to each individual’s liquidity and risk appetite.
Q: What is your view of the regulatory landscape surrounding crypto?
A: The novel and evolutionary nature of cryptocurrency has led to differing interpretations from the various regulators, leading to a varied but evolving regulatory landscape. To take a closer look at Asia, it has a very diverse range of regulatory environments when it comes to crypto. Singapore is leading the regulatory regimes, while Japan is catching up. The Monetary Authority of Singapore (MAS) introduced the Payment Services Act (PSA) last year, a really progressive framework to regulate the space. Whereas in Hong Kong, which traditionally has very open markets, the government is more conservative about crypto.
We have a strong point of view about the importance of regulations, compliance and security. And we’ve backed up that point of view by upholding the highest compliance standards. We’re adapting to it all in an innovative yet compliant way.
Q: What are the biggest challenges facing the crypto markets at the moment?
A: First, I think it is regulatory uncertainty, especially the lack of clear regulatory guidance in certain areas. And then there are still concerns about safety and security.
Q: How are you tackling this security issue?
A: At Amber, we operate with a security first mentality from Day One. We have allocated over a quarter of our company budget to implementing security controls across business lines, far exceeding industry averages. We partner with big names within and beyond the industry, including Fidelity-backed enterprise crypto security provider Fireblocks, as well as BitGo and SlowMist. More importantly, we have built a robust security team. Earlier this year, we hired Dr. Chiachih Wu, PeckShield co-founder, as a blockchain security specialist to lead our blockchain security research and develop our on-chain risk management platform. In the past four months, the team has safeguarded a dozen protocols, including Primitive Finance for which the team identified 500 wrapped ETH at risk.
Q: Finally, where do you see the crypto markets in five years’ time?
A: In five years’ time I am sure that crypto finance will be mainstream, not only in terms of its mass adoption globally, but also in the extent of assets it will cover. This will extend from crypto-native assets to traditional assets such as equities, bonds, and real estate as well as giving liquidity and value to new forms of assets via NFT such as data and content.
Michael Wu is co-founder and CEO of Amber Group, a leading global crypto finance service provider. Prior to founding Amber Group, he was a quantitative analyst at Goldman Sachs, a macro trader at Morgan Stanley and a portfolio manager at a billion-dollar hedge fund. Amber Group services over 500 institutional clients and has cumulatively traded over $500 billion across 100+ electronic exchanges, with over $1.5 billion in assets under management. By the end of 2021, it is set to generate over $500 million in revenue.