The Tribune

A crypto currency exchange Bahamian subsidiary says it will unveil a new feature for its platform next month to further cement its “significant” contribution to the parent's global brand.

Tim Byun, chief global government relations officer at OKX, told Tribune Business the new feature will "add another chapter" to OKX Bahamas when it is revealed by the end of November.

Without revealing details, he reassured that OKX has already received regulatory approval and is now in the testing phase to make sure the new feature is reliable and works as promised.

“OKX Bahamas has been making a significant contribution because OKX Bahamas is regulated by the Securities Commission of The Bahamas (SCB), and therefore we need close co-ordination with the regulators," Mr Byun said. "And, as you know, OKX globally is seeking other licenses, and we are on step two out of three licenses out of Dubai. It really teaches us how to work with the nuances of different regulators' frameworks.”

The Digital Assets and Registered Exchanges (DARE) Act, the foundation of The Bahamas' regulatory regime, has made it easier for OKX to approach other jurisdictions as it provides the assurance they are operating in a well-regulated environment and understand what best practice is.

Mr Byun added: “I think we have weathered the FTX fall-out really well because of our exchange, and because of our principles and the way we have built OKX Bahamas is actually very different from FTX.

"Not to say that our approach is correct. It's just that the dramatic downfall and dramatic turn of events, there would have been more drama if we had approached The Bahamas in the exact same way as FTX.”

To provide investors and clients with greater comfort in FTX's aftermath, OKX is ensuring its reserves are independently verified on a monthly basis to prove it has sufficient assets to meet repayment demands. Mr Byun said: “We are on our eleventh month of proof of reserves where we actually showcase what the assets are of our customers, and what they're currently valued at. So it's not us making any judgment, but it's really the market values.”

OKX has over $10bn of customer tokens backed by either US dollar stable coins, Bitcoin or Ethereum coins. Mr Byun added: “Let me just clarify when I say proof of reserves. The major principle of OKX is that we operate on a 100 percent reserve system, meaning that we're not a bank where we take customer's money and we lend it out and ensure that we have some capital leftover.

“We receive customers' tokens on our platform, and 100 percent of that is ready and able to be withdrawn back to our customer when they want it, whether it's 10 minutes from now or 10 years from now. We don't re-pledge it; we only use it for long-term investments for our purpose. It just sits on the platform; it doesn't leave the platform.”

Regulators need to be “mindful” that there are other types of crypto business that do lend money from their reserves and need to be distinguished from those that do not.