A Goldman Sachs trader just named CEO of a crypto firm's Japanese outpost explains why he's not scared of regulators

  • The market maker B2C2 announced its new CEO for a Japanese outpost.
  • Phillip Gillespie, formerly of Goldman Sachs, will start at the end of the month.
  • He told Business Insider he saw a big opportunity in the market and wasn’t too concerned about regulators.

B2C2, a top cryptocurrency trading firm, is leaning into the Asian market with a new outpost in Japan.

Leading efforts to expand the firm’s reach on the continent as B2C2’s Japan CEO is Phillip Gillespie, formerly of Goldman Sachs. B2C2, an over-the-counter crypto trader based in the UK, is among the most notable market-making firms in the nascent market for digital coins. Gillespie will start at the end of the month and will be based in Tokyo.

“I am very pleased to welcome Phillip as CEO of B2C2 Japan,” said Max Boonen, the founder of B2C2. “His expertise in the FX market will be a great asset as we ramp up our business in Japan and the Asia Pacific region more broadly.”

Gillespie told Business Insider he was looking to expand his team to five people later this year.

“The goal is to help provide liquidity to our clients and grow our OTC business, which we hope will exceed our volumes on exchanges by year-end,” he told Business Insider.

Japan has become a big market for cryptocurrency trading, according to Deutsche Bank.

Forty per cent of bitcoin trading from October to November was conducted in yen, according to a Nikkei report cited in a note by Masao Muraki, a global financial strategist at Deutsche Bank.

Following is lightly edited interview with Gillespie about the opportunity he sees in the market and his new role.

Chaparro: You join B2C2 from Goldman Sachs. How does your experience there translate into this role?

Gillespie: My role at Goldman Sachs (and JPMorgan and Barclays before) has always been to oversee the electronic and systematic trading of FX at banks. Although cryptocurrencies belong to its own asset class, there are many similarities between cryptos and electronic trading in FX. The client bases are the same and the core market-making functions share several similarities. One way to describe crypto trading is it’s similar to electronic trading of FX in its infancy. In that sense, I have been through the evolution in FX and hope to be part of a team that works to replicate the success in FX to crypto trading.

Chaparro: Do you expect they will follow through on the reported crypto trading desk they’re set to launch this summer?

Gillespie: The chances are high, and the endeavour is led by exceptional leadership.

Chaparro: Japanese trading makes up more than 40% of all bitcoin trading. Has the market reached a top in Japan? What opportunities are there for B2C2?

Gillespie: I think there is a lot more potential for growth as Japanese retail brokers become involved in the market and products like CFDs expand within the retail community. Japanese brokers want liquidity from a credible market maker, and I believe B2C2 will be able to provide the service necessary to further expand the crypto market in Japan.

Chaparro: How is B2C2 positioning itself to capitalise/adjust to potential regulatory clampdowns in Asia? Does this even impact operations?

Gillespie: We are actively engaging with the regulators and want to make sure our operations are fully understood by regulators and counterparties. In Japan, for example, we plan to be members of both JBA (Japan Blockchain Association) as well as JCBA (Japan Cryptocurrency Business Association).

Chaparro: Speaking of regulations, what is your impression of the “bloodbath” market crash this week? How much is it connected to regulatory clampdowns? Is this a concern for you?

Gillespie: The “bloodbath” may have occurred in part due to the market’s concern on a regulatory crackdown, as headlines from South Korea initially led the downfall. However, I think it’s too simplistic to say that regulatory concern was the only driver. There are stretched positions and other factors leading to a sharp correction. And these moves are expected. The sharp moves are the norms in my mind as crypto are still in its infancy, and our risk management and pricing principles are built to withstand these sharp moves in the market.

Chaparro: Do you see a futures market coming to fruition in Japan? When do expect big institutional money to enter the fold?

Gillespie: Japan has been looking to invest in financial technology for years, and I believe that Japan is fully committed to the growth in cryptocurrencies. In this sense, I think we will continue to see the evolution of crypto products and usage being led from countries like Japan. 2017 was a big year for cryptocurrencies, and it’s caught the attention of very large institutional players. The more people understand what cryptocurrencies are the more legitimate money will flow into the market.

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