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Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto 'mainstream.' Exchange lightly edited.


This week, senior reporter Stacy Elliott spoke to Cynthia Wu, founding partner and head of business development at Matrixport. Prior to joining the firm, she worked as a commodities trader at Noble Group, headed up commodities product development at Hong Kong Exchanges and Clearing Limited (HKEX) and was investment director at Bitmain. Matrixport, a Singapore-based firm founded in 2019 as a spin-off of Bitmain, oversees $10 billion in AUM and custody and $5 billion in average monthly transaction volume.

cynthia-wu-matrixport

Tell me about how Matrixport developed its custody solution, Cactus Custody. What about it appeals to institutional-grade clients?

Wu: Our story might be a little bit different from other service providers because for a lot of them, they’re providing this as a product and service to others. And actually the first version of our’s was Bitmain’s proprietary custodian solution because back then, 2017 and 2018 … cryptocurrency had become a huge asset on the company’s own balance sheet. And back then there was no Coinbase custody, no bigger institutional-grade solution you could use.

So then the last option was to build one. We hired a senior security team who were very experienced in the cybersecurity space and a cryptographer. The first version looked like a treasury management system for crypto management. And then later what was being offered by Bitmain, we took this technology into Matrixport, because we realized that custodian service was the backbone of a lot of other value-added services we provide.

We’ve had many iterations to make sure we can service not only miners, but also funds and projects and other types of trading companies. And we’re still using our own custodian solution internally as we develop and evolve. Oftentimes before our external clients raise a request, we already have it on our roadmap.

I know the company started by mainly servicing crypto miners. How has that changed since 2019?

Wu: First year, we were probably 80% to 90% miners. Now, probably less than 40% are miners. The rest are really the institutional clients with a financial background or other crypto projects. We’ve even been approached by some NFT businesses that wanted us to store NFTs for them because they feel as it gains value, there might be a need for it to be held with a custodian.

To be honest, I will say more than half of the new requirements come from DeFi-related activities. People want to have connectivity and accessibility within custody.

How are we going to see Matrixport continue to grow? What’s on the roadmap for the next six to 12 months?

Wu: Our people in Central Europe are building a team and talking to relevant people and clients housed in the region to understand what our value proposition is compared to some of the other service providers there. That definitely involves a lot of building of the marketing team, sales team and also regulation compliance and legal teams to be able to support all our go-to market strategies there.

The other aspect is that because we’re still in a relatively early stage of the crypto supercycle, we have probably close to half a billion crypto users. We think we’re going to see another one billion users coming to the space. So the big challenge is how do we educate them. So we really want to offer educational content, which is different from our regular financial content. That’s definitely a big piece for us – reaching out to the crypto curious and convert them into users.

The last piece is product innovation. We currently have a lot of vanilla products and more sophisticated products that cater to different user activities and also level of understanding and risk appetite. And we need to keep doing that. In the next half a year, we have five or six new products that will be rolled out.

It’s a bit early to ask, but how do you think the new China cryptocurrency crackdown will play out?

Wu: We still need to see how that settles. Normally how things happen in China is that there are documents – something like this – issued by different levels of government, right, and then it will probably cascade into something more specific. But it’s going to take time to cascade.

Oftentimes, when this kind of document comes out, people will say, ‘OK, let's wait and see what will happen in one to two weeks or even one to two months.’ We still need to know which are the relevant [government] departments, what are the kind of execution methods. Then we’ll be able to see the real impact. So for now we need to wait for it to trickle down.

When it does trickle down, the execution is going to sit with each province, or even with certain cities. So it's like three layers of administration. Then it takes on different understandings and interpretations. Certain cities or provinces might be more badly impacted than others. It’s still too early to say. 

Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto 'mainstream.' Exchange lightly edited.


This week, senior reporter Stacy Elliott spoke to Cynthia Wu, founding partner and head of business development at Matrixport. Prior to joining the firm, she worked as a commodities trader at Noble Group, headed up commodities product development at Hong Kong Exchanges and Clearing Limited (HKEX) and was investment director at Bitmain. Matrixport, a Singapore-based firm founded in 2019 as a spin-off of Bitmain, oversees $10 billion in AUM and custody and $5 billion in average monthly transaction volume.

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