Post-FTX world needs ‘next-generation’ exchange, ex-Coinbase exec says
The new exchange seeks to differentiate from incumbents via a non-custodial, stablecoin-native model
TrueX and Adobe stock modified by Blockworks
A crypto exchange’s emergence out of stealth earlier this week came nearly two years after one of the industry’s largest players crashed.
Called TrueX, the new company — dubbed as non-custodial and stablecoin-native — seeks to be a “strong alternative” to the segment’s traditional exchange incumbents.
“The collapse of FTX highlighted the need for a safer and more trustworthy market model,” TrueX co-founder Vishal Gupta told Blockworks. “This presented an opportunity to build a next-generation exchange from the ground up, one that fully separates trading from custody and integrates stablecoins for settlement.”
Gupta, the former head of exchange at Coinbase, created the company with ex-Coinbase engineer Patrick McCreary.
Read more from our opinion section: Crypto custodians should learn from TradFi
One of the ways TrueX seeks to differentiate itself is its custody model. While the exchange helps facilitate settlement, Gupta noted that client assets are held by its “qualified custodial partner,” Paxos, Gupta noted.
“Whether driven by regulation or client demand, separating execution from custody is now essential for trust and security,” the executive added.
The ongoing institutional adoption of crypto assets means such market participants “need a trusted venue that prioritizes transparency, execution quality and asset protection,” Reciprocal Ventures general partner Craig Burel said in a statement. He added the “critical improvement” TrueX provides lies in its non-custodial platform and ultra low-latency matching engine.
This launch comes as the institutional digital asset custody market is projected to grow at a compound annual growth rate of 23% through 2028, according to an OKX research report published last month. Such findings highlight the increasing demand for segregation of duties related to trade execution and asset custody, the report added.
Third-party custodians are particularly preferred by institutions, with 80% of crypto and traditional hedge funds reporting those as their first choice, according to OKX.
There’s also a big opportunity to capitalize on the strengths of stablecoins, Gupta argued — in this case to offer faster and more efficient trading. PayPal USD is the exchange’s default settlement currency.
Read more: Circle and Paypal’s stablecoins keep notching gains
Stablecoins are crypto assets designed to maintain a stable price by being pegged to a commodity or currency, such as the US dollar.
Bernstein analysts wrote in a report this week that stablecoins are becoming “systemically important.” The market capitalization for stablecoins stands at roughly $170 billion, with tether (USDT) accounting for roughly 70% of that total.
Gupta said of TrueX: “Starting fresh allowed us to design a more secure and flexible platform, ensuring we can be nimble in adapting to the evolving needs of the crypto market.”
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