A group of former Morgan Stanley executives today announced the launch of Phemex, a “high-speed” cryptocurrency derivatives platform designed for both retail and institutional investors.
Phemex is being touted as a low-latency trading platform, meaning it does not have significant delays on its platform, which can reach speeds of up to 300,000 transactions per second. It offers contracts in Bitcoin (BTC), Ethereum (ETH), XRP, Litecoin (LTC) and EOS. In the future, it plans to offer contracts backed by traditional finance instruments, as well as real-world commodities, such as metals, agricultural products, and energy.
The Singapore-based team is led by Jack Tao, an 11-year veteran executive from Morgan Stanley where he was the Global Development Leader of Morgan Stanley's Electronic Trading (MSET) Benchmark Execution Strategies (BES). The other seven core developers at Phemex were also part of the same unit at the investment bank.
In a press release, Tao highlighted the Wall Street credentials of his team. “We are the first exchange to truly bring Wall Street level sophistication to the worldwide crypto derivatives markets,” Tao said. That sophistication has enabled the team to parlay its expertise into designing a reliable and scalable platform, he said.
As an example, Tao pointed to problems experienced by crypto exchanges during the 2017 run up in crypto prices. Many crashed or slowed down due to a surge in transactions. Phemex claims that it has an order entry and response time of less than 1 millisecond.
“As executives from Morgan Stanley, we know what kind of ways, what kind of direction, or what kind of architecture can support high-frequency trading, stability, and low latency,” stated Tao. According to him, their platform is “technically on par” with the likes of Nasdaq. Phemex also has a cold wallet which automatically receives all deposited cryptoassets.
The company is reportedly seeking a regulatory license from the Monetary Authority of Singapore (MAS) and does not currently service US-based clients.