Perseus Telecom has launched a new initiative with the aim to provide industrial-strength security for bitcoin exchanges, e-commerce, online gaming and multimedia sites.
Perseus started accepting bitcoin payments just last month. The company is a provider of high-speed communications used by hedge funds, trading firms and media organisations in major financial hubs from London to Tokyo.
The company’s Digital Currency Initiative (DCI) is being introduced just weeks after the Mt. Gox failure and Perseus seems to think that no crisis should ever go to waste. In fact, it is hoping to capitalise on bitcoin security concerns.
In addition to the initiative, Perseus and Atlas ATS also announced the launch of a globally integrated bitcoin exchange.
Mt. Gox is a learning opportunity
Perseus Telecom EMEA head of business development Carl Weir described the Mt. Gox collapse as a “learning opportunity.”
“The goal of DCI is to make sure that there is financial institution level security, KYC, and trading available and secure in multiple regions, hence Perseus’ role in this.”
Perseus points out that other bitcoin exchanges view the Mt. Gox failure as the result of a new industry undergoing a shakeout. Failures are not uncommon in immature, unregulated markets or technologies, it adds.
Perseus has teamed up with Atlas ATS and Strevus Inc. The latter hopes create one or two US-based currency exchanges. Appropriately, New York State announced that it would start accepting applications for digital currency exchanges earlier this week.
Security should be a top priority
The Mt. Gox collapse is viewed by many as the end of an era. As the bitcoin ecosystem matures, it is likely that regulation and security will play a bigger role, and this is exactly where Perseus sees a market opportunity.
“With DCI, we’re ensuring that anti-money laundering and know your customer rules are in place, and can be reported to regulators should they require it. In addition, bitcoins should be placed in cold storage, so that users whether financial institutions or individuals, don’t lose their bitcoin,” said Weir.
“If someone hacks the exchange site, there’s a layer within the trading environment which automatically rejects inconsistent code, which means it doesn’t get to the trading system.”
Atlas ATS is contributing multi-tiered software that allows it to control access and limit exposure on all levels. Even if an attacker penetrates the web tier, that won’t be enough to interfere with the core matching engine, which is disconnected from servers that actually store bitcoins. Most bitcoin holdings will be kept in cold storage.
First exchange officially launched
Perseus and Atlas ATS aren’t wasting time. The companies have announced the launch of a globally integrated bitcoin exchange in New York, Hong Kong and Singapore. Their goal is to facilitate bitcoin trading by large financial institutions. Perseus CEO Jock Percy said:
“Now, institutional investors and banks can see that there are known players with the right pedigree engaged in bitcoin.”
The Wall Street Journal points out that Perseus’ high-bandwidth lines are used to connect securities exchanges to execution platforms around the world. Percy highlights that the company’s clients have expressed demand for such services, but they were concerned about regulatory compliance and risk.
Percy also took a swipe at existing bitcoin exchanges, saying most of them reside on cloud-based servers that are inherently glitchy, while the Atlas ATS platform will be located in a robust, dedicated network.
Soft launch
The Atlas ATS platform has already been soft-launched and it handles about 10,000 transactions a day. Atlas ATS CEO Shawn Sloves said integration across multiple locations will improve liquidity by creating a global order book that circumvents the existing bitcoin trading environment.
He described the current environment as regionally focused and fragmented and said it was not “Wall Street grade.”
Sloves expects daily trading to hit 100,000 transactions by the end of the year and he is basing his prediction on demand expressed by institutional clients, not bitcoin enthusiasts. This, he argues, is what will set the platform apart from existing exchanges.
The big fish are coming and the Mt. Gox collapse is just blood in the water.