London Stock Exchange Trading Tech to Power New Hong Kong Crypto Exchange

LSEG Technology, the technology solutions provider for the London Stock Exchange Group, has announced that its matching engine will be used to power a new Hong Kong-based digital assets exchange. The news was announced in an LSEG Technology press release Jan. 22.

The forthcoming digital assets exchange — dubbed AAX — comes from blockchain and crypto-focused fintech firm ATOM Group. The platform will reportedly become the first digital assets exchange to use LSEG Technology’s so-dubbed “Millennium Exchange,” which is a low latency and scalable matching engine already reportedly in use at traditional exchanges such as LSE, Borsa Italiana, the Oslo Stock Exchange, and others.

AAX — which is slated for launch in the first quarter of this year — will reportedly use the LSEG matching engine to form the basis of its core trading platform. Speaking of the deal, ATOM Group CEO Peter Lin said the technology would help deliver “greater levels of fairness, transparency, and performance” for crypto traders.

The licensing deal between a stalwart mainstream market solutions provider and an emergent disruptive platform apparently aims to mitigate concerns over security, market manipulation, and high-volume performance in the crypto industry.

In the Hong Kong context, there have been recent indications from the local securities regulator, the Securities and Futures Commission (SFC), that a legal framework to regulate crypto exchanges is under consideration, with the SFC chairman stating last October:

“We need to see if and how these [digital assets trading] platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors[‘] interest[s] are being protected.”

In November, the SFC released details of its evolving proposed conduct regulation for crypto exchanges, alongside guidelines for funds dealing with cryptocurrency. As Hong Kong’s formal crypto regulatory environment continues to take shape, some local lawyers have warned that new regulations may prove cumbersome or even harmful for new entrants to the crypto industry.