Coming in August is the launch of BlockEx, a provider of white label cryptocurrency trading solutions. Targeting binary options and forex brokers, BlockEx enters a field that also includes ExGate, Ibinex and FxOpen that provide white label cryptocurrency exchange offerings, as well as liquidity that can be connected to a broker’s existing platform.
Differentiating themselves, BlockEx is taking a page from binary options provider. Similar to the binary options provider, BlockEx will be offering a turnkey end-to-end solution for brokers to provide cryptocurrency trading to its customers. The solution includes two skin variations of its front end; a social trading version and another that is similar to forex webtraders. In addition, BlockEx has partnered with UK-based Secure Trading to provide BlockEx’s broker clients with a turnkey payment solution to handle customer deposits and withdrawals. BlockEx is also adding integration with cellxpert and their affiliate tracking solution.
Speaking to Adam Leonard, CEO and Co-Founder of BlockEx, he explained to Finance Magnates that having been part of the bitcoin community, as well as having experience in the binary options and gaming industry in the past, his team has received a lot of interest from brokers of ways to integrate cryptocurrency trading. For the most part, brokers have been relying on CFDs to provide crypto exposure to their customers.
Leonard explained that due to limitations of liquidity, CFDs have been confined to only bitcoins and litecoins. As such, for a truly wider offering of cryptocurrency trading, means offering the underlying asset and not a synthetic CFD version of it. According to Leonard, for forex and binary options brokers, integrating actual cryptocurrencies within their platforms is often a difficult endeavor. Specifically, Leonard cited regulation as an impediment, due to brokers becoming classified as cryptocurrency exchanges if they add the underlying crypto assets to their platform.
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Aiming to solve this problem, BlockEx created its offering as a white label cryptocurrency exchange and trading platform. BlockEx is currently targeting medium sized forex and binary options brokers, with its product a solution to allow these firms to offer cryptos to their customers using a separate brand.
Leonard explained that due to lack of clarity with regulation, they believe it currently makes the most sense for firms providing cryptocurrency exchanges to separate the business from a broker’s main forex or binary options brand. Specifically in regards to payments and handling customer funds, Leonard cited that cryptocurrency businesses can be a problem as banks have been known to close accounts of bitcoin related ventures with little to no warning.
Speaking about regulation, Leonard stated that he believes “there is a clear path for the US and Europe to gain regulation in place.” As such, he believes that firms should “operate as if you are regulated,” taking into account future expected costs of licensing and applying know your customer (KYC) and anti-money laundering (AML) procedures.
As part of their expected launch on August 15th, BlockEx is also releasing X-Stock, a cryptocurrency exchange that they will be operating. Leonard explained that BlockEx wanted to create a working example of what can be done with its platform, and X-Stock will operate as its broker arm to onboard retail customers. Leonard added though, that in the future, X-Stock could be split off or sold, in order not to compete with its broker customers.