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Oriental Daily Interview
In January 2017, LakeBTC had an interview with Oriental Daily, the mostly read newspaper in Hong Kong, China.
Q: Do you have some stories to share about founding LakeBTC?
Yeah sure. LakeBTC began with bitcoin, and our goal is way beyond cryptocurrencies. Today, LakeBTC stands for Lake Blockchain Technology Company or Lake Banking Technology Company.
LakeBTC was started in early 2013 when bitcoin began to gain traction. Initially it was for professional traders and investors only. As lots of users from all over the world flooded in, we realized it is not just another sophisticated trading platform for wall street pros.
I remember there’s a user, who works in another country as a foreign labor, needs to send money to her children back at home. As you can image, she doesn’t earn much while the banks charge hefty fees on a simple wire transfer. Sadly, ripping off the poor is like a crime legalized by the governments.
Another user is still a student, who works as a part time designer/translator from customers from abroad. This freelance job does not generate lots of cash but it helps pay off his college tuition. Still, the current payment and currency exchange solutions available are either too expensive or troublesome. He’s looking for something simple, reliable, cheap, and free of chargebacks.
And there are many users, excluded by the traditional banking systems, who have some money to save and earn the interest, build the credit history, and get the credit line for their cars, homes, college, and small businesses. All of these stories shocked us and made us to review our original business model of LakeBTC. It’s hard to believe that in the United States, there are over 1/3 of the population that’s unbanked or underbanked. That is more than 100 million Americans! In the world there are billions and billions of people without bank accounts.
Some say banking is a privilege. This is not right. Banking service should be available to everybody, just like clean water and fresh air. LakeBTC does not want to become just a firm serving fund managers, rich individuals and professional speculators. LakeBTC wants to become the one who extends the comprehensive banking and financial services to the billions of unbanked people around the world, at very affordable fees or even free in the long run. We have the technology and business model, which generates profits (not by ripping off the poor, unlike the others).
Money should be able to flow freely, from one person to another, from one country to another, from one currency to another. Financial services industry is being over regulated, in many ways and in many countries. Everybody, especially the poor, is paying too much compliance taxes today. Yes, anti-money laundering and anti-terrorisms, investor protection are important, and financial firms should be regulated. But, there are something that the regulators should and can do. For example, different country, different agencies, lawmakers from the same jurisdiction can utilize modern technology to better and more efficiently do their jobs. In the future if cash is killed and all transactions move to blockchain and platforms like LakeBTC, it’s quite easy to detect and trace down illegal activities.
LakeBTC enforces AML and KYC from day one, and the bitcoin technology itself is public and transparent to everybody. We try to follow all applicable laws and regulations because we believe, staying compliant is to the best interest to all our users.
Q: What were the biggest challenges you and your team faced building LakeBTC? And what was the most memorable / precious moment bringing up the company?
LakeBTC is probably the only major exchange without any security scandals or stolen coins since inception. Mt.Gox is gone, in a very bad way. Other exchanges lost millions of dollars worth of coins, for multiple times. However, human nature is, people forget quickly and repeat the same mistake again and again. If you don’t get killed by a mistake, you make it again until you do. Average users are not professional investors, and they are unable to identify the risks involved and overcome the weaknesses most people have.
LakeBTC is not a big fan of conferences or public exposures, as we focus on our product and service, risk management and internal controls in order to provide the best user experience and most secure venue for all users. We are building something big in the long run, that’s why we do not pay too much attention on our market share or growth rate month by month or quarter by quarter. If you are doing something meaningful, time is your friend. Today, we have millions of accounts created and this number is growing steadily.
A couple of years ago, one of our users, an executive at a top investment bank making millions a year, came to us saying his email account was hacked. As a professional algo trade, he opened accounts with a couple of other exchanges as well. Unfortunately, the hacker planted a trojan, cracked his email account, with which reset his passwords, and stolen his money from all exchanges except LakeBTC. Our team stopped the hacker thanks to our comprehensive security measures including one-time password, SMS confirmation, abnormal activity detection, and two-level security reviews. Besides, LakeBTC has the top risk management, internal control, cold wallet and process controls. Our technology team, financial team and risk management team are physically located at different locations. We also have a sophisticated market surveillance systems watching for unusual activities 24x7. Safeguarding a lot of money (even for a rich person like him) from stolen is something memorable.
Q: Any specific plans / goals the platform would like to achieve in 2017? What are the latest business strategies?
We do have a roadmap that’ll keep us busy for the entire new year. For example, we plan to add a feature to facilitate conversion of different currencies and integrate with the our LakePay service. A new API will be introduced to better serve our users and integrate with our business partners. A new program to train, serve and reward LakeBankers around the globe. If you are a freelancer, SoHo, merchants, small business owner, or just a regular user, you can help others and generate decent income by working as a LakeBanker.
Our strategy is in line with our vision — listen to our users and better serve their needs. Streamline our services, boost the productivity, and lower the cost. Make our service affordable to billions of people, and make it free one day in the future. For those low-income users living in the underdeveloped or remote areas, there might be no computers, paved roads, airports, or bank branches. We are working on a plan to give them smart phones for fee, with which they can access LakeBTC and enjoy all the financial services available.
Q: Do you think bitcoin is getting more popular recently? What are the reasons? How do you see the future of bitcoin?
Obviously yes. As the prices going up and down like a rollercoaster, it’s occupying on news headlines more often. And we do see more new user registrations lately. It’s good and bad. Good thing is more and more people get to know the word bitcoin. Bad is they know it with a negative impression, and many people did lose money in the craziness.
We love the bitcoin idea and the underlying blockchain technology, and overall we are bullish about its future. It will not become or replace FIAT currencies, but it will be an important asset class, something like gold. Bitcoin and blockchain are like the two sides of a coin — you cannot really separate them by talking about one thing without the other. That’s why we are not so optimistic about the so-called blockchain only technologies, private chains, or altcoins.
That being said, we also have major concerns including market manipulations, hashing power centralization, the block size limit, politics (yes even in this young industry), etc. Keep in mind, any one of these is serious and could be fatal.
Q: What types of investors like to invest bitcoin? Bitcoin price has surged over 100% in 2016; do you think it will keep this strong performance in 2017?
We see all kinds of users, but in general professional traders and computer specialists are more interested at the time being. I have seen users from 15 years old all the way up to 95 years old, including students, professionals, merchants, business owners, merchants, miners, traders, institutions, hedge funds, etc.
As an exchange LakeBTC is a marketplace for people to trade. We strive to provide a fair, efficient, and affordable platform to match supply and demand. Strictly speaking we are supposed to be market neutral and not in the position to speculate on the prices. In general as I said, we are bullish (with concerns mentioned above). I guess the recent price surge was related to market manipulation and leverages at other venues. It is a very risky game if you bet too much on it, especially with leverage.
Q: There are many bitcoin trading platform in the market. How does your platform keep its competitive edge? Any advice for investors in choosing which platform to use?
Good question. First of all, like I said, we are not just a bitcoin exchange.
Our strengths include security, liquidity, fairness, and service, which make LakeBTC stand out of the crowd. There are more info at our website that’s quoted here:
Short answer: we know what we are doing.
Long answer: Security, liquidity, and service are three strengths that make LakeBTC stand out of the crowd.
Security - We take the safety of users assets and personal information very seriously. People have to realize that a bitcoin exchange is not just another technology company. It is, more importantly, also a financial one. There's no denying that SSL encryptions, cold storage, 2-factor authentication, and SMS confirmations are important (we have them all), but risk management and internal controls are really what matter to financial institutions in the long run. Operating a financial firm needs lots of training, experience, and most importantly, a completely different mindset. We are proud of our team of seasoned financial veterans with years of experience in traditional capital markets. To best protect users' assets from fraud and theft, all withdrawals need to go through a two-level manual approval at the final stage of clearance.
Liquidity - LakeBTC is a marketplace for all users, including individual investors, miners, merchants, payment processors, professional market makers, and institutional investors. As one of the Big Four bitcoin exchanges in the world and member of a few other major bitcoin indexes, users can expect excellent liquidities at LakeBTC at all times.
Service - Our customer support team works hard to provide extraordinary services to our users. Most user requests and inquiries will be replied within 30 minutes during business hours. Our web design is meant to be simple and easy to use, and we provide professional trading tools such as LakeTrader with live data, pro charting, and OneClick trading, which are convenient to all users, especially who trade more frequently. We provide a variety of deposit/withdrawal methods to our users including bank wire.
Fairness - Additionally, creating a fair and efficient marketplace is also important to protect investors' interests. We do everything in our power to minimize market manipulations and unfairness. Market surveillance program, carefully designed products, comprehensive risk management, and strict internal controls are all meant to make sure this young and energetic market be fair and safe to every participant. At LakeBTC, users are best protected from financial predators, bitcoin theft, online fraud, market manipulators, trader errors, bot bugs, and flash crashes. We provide the same level of service to all users at all times. All users are treated with the same policy published on our website.
As I mentioned earlier, our team came from the traditional financial world with many years of experience in investment banking, commercial banking and private equity etc. We can identify risks, understand risks, quantify risks, and manage risks properly. There are so many exchanges out there started by a couple of college kids with zero such knowledge or mindset. Our advice is very simple: look at the exchange’s track record.
Q: Finally, could you share with us some data like company’s revenue, profit, bitcoin turnover etc? How does your platform cover its operating costs?
Much of the data is proprietary and not available to the public. Like I mentioned, we have millions of accounts created from over 100 countries in the world. Still a long way to billions of users, but we are getting there. Our financial data is healthy. Trading volumes vary from about 20k to 55k coins per day for all 32 currencies and 38 currency pairs supported. The lists are growing as we are adding more currencies to our platform.
Q: Do you also have any comments about the target price of Bitcoin this year?
Sorry, again, as a marketplace, we are supposed to be market neutral. We cannot make price predictions or encourage our users to buy or sell.
Q: And is it true that Bitcoin can rival gold as safe haven?
Personally I believe so. Bitcoin is way better than gold in many ways. However, it may take a long time to gain the mainstream to recognize its tributes, if the concerns I mentioned are either solved or contained.