Asia's Bakkt? AAX Rolls Out Crypto Trading With London Stock Exchange Tech

AAX, a Hong Kong-based cryptocurrency exchange that uses the London Stock Exchange's matching engine technology, has officially launched.

After 19 months of development and testing, the company said on Thursday that the exchange platform has gone live on web and mobile, targeting retail and institutional investors with spot, futures and over-the-counter peer-to-peer trading.

The LSE said previously that AAX would be the first crypto exchange to utilize its Millennium Exchange matching engine, which also powers major equity markets like the London one itself and the Hong Kong Stock Exchange.

In addition to crypto-to-crypto spot trading, AAX expects the derivatives market to be a major focus with its offering of perpetual contract futures settled in bitcoin.

"LSEG Technology is delighted to have successfully deployed our world class matching engine capabilities at AAX. This is the first time that Millennium Exchange has been deployed in the cloud, bringing its, scalability, flexibility, reliability and seamless direct market access to AAX," LSEG Technology's CIO Ann Neidenbach was quoted as saying in a statement.

The exchange will take a hybrid approach to the custody of customers' digital assets, combining its own in-house storage solution and third-party institutional custodians.

Earlier this year, Intercontinental Exchange, the parent company of the New York Stock Exchange, launched Bakkt, a long-awaited market for physically-settled bitcoin futures targeted at institutions.

On the retail side, AAX uses a similar strategy to exchanges like Huobi or OKEx by enabling peer-to-peer OTC trading as a fiat on-ramp supporting Chinese yuan, U.S. dollars and Hong Kong dollars.

AAX's launch comes just a day after the Hong Kong Securities and Futures Commission released a warning on exchanges that offer cryptocurrency futures trading in Hong Kong.

"We welcome the SFC's latest guidance on virtual asset futures contracts. We are now studying very closely whether any of the instruments we offer fall under the SFC's guidance. AAX has always envisaged operating in regulated markets for cryptocurrencies that encourage innovation but that also provide investor protection and we will take appropriate steps to ensure we are operating within all applicable regulations in all the markets where we are active."