What Is a Crypto Exchange’s Real Moat?Coinhako’s Answer Lies in Compliance

Traffic still matters. But it is no longer enough.

As crypto exchanges enter a phase of saturated user growth, the nature of competition is changing. Over the past few years, platforms have experimented with almost every growth lever available: new asset listings, trading incentives, derivatives, structured products. After multiple market cycles, one reality has become increasingly clear — marginal returns from homogeneous competition are shrinking, while trust costs continue to rise.

More importantly, what truly expands the size of the market is not higher trading frequency from existing users, but a shift in capital structure itself. Long-term, larger-scale capital behaves very differently from speculative flows.

Coinhako Group CEO Yusho Liu reflected internally on 2025 by noting that the industry is entering a new phase — one where growth is no longer driven by volatility or sentiment, but by trust, rules and long-term allocation needs. This shift has prompted many exchanges to reassess a fundamental question: what really constitutes a sustainable moat?

Traditional Capital Is Not Absent — It Lacks a Trust Interface

Regulation is increasingly becoming the bridge between two financial worlds.

Crypto market growth comes from two sources: new users and structural changes in capital participation. It is the latter — professional and institutional capital — that ultimately raises the market’s ceiling by driving larger volumes, more sophisticated products and longer investment horizons.

A commonly asked question is why traditional capital has not entered crypto markets at scale. The answer is often simpler than assumed. For professional investors, the primary concerns are not short-term returns, but three foundational questions:

• Is the regulatory framework clear?
• Is asset security verifiable?
• Are platform governance and risk controls sustainable?

Without credible answers, exchanges risk falling into a vicious cycle: reliance on short-term traffic undermines long-term trust, while the absence of trust deters more durable capital. This is why, in recent years, compliance has evolved from a perceived cost into a structural advantage. It determines whether an exchange can legally interface with the banking system, handle larger capital flows and convert opaque risks into auditable processes.

Without regulatory trust, the boundary between traditional finance and crypto remains an invisible but insurmountable barrier.

Compliance as a Cost — or as a Long-Term Asset?

Coinhako chose the slower and more demanding path.

During periods of rapid industry expansion, compliance is often treated as friction. Coinhako, however, has taken a different approach — embedding compliance and security as foundational infrastructure rather than temporary strategy.

Since inception, Coinhako has operated within Singapore’s regulatory framework, applying higher compliance standards across product design, fund flows and user onboarding. This approach imposes stricter constraints, but also defines the platform’s long-term operating boundary.

From a regulatory perspective, Coinhako is licensed by the Monetary Authority of Singapore (MAS) under a Major Payment Institution (MPI) licence, allowing it to conduct Digital Payment Token Services and Cross-border Money Transfer Services within a regulated framework. As global regulation tightens and entry barriers rise, this licensing structure has become a prerequisite for expanding institutional and cross-border financial services.

Compliance, however, extends beyond licensing. In 2025, Coinhako deepened its cooperation with Singaporean regulators and law enforcement, assisting in the interception of hundreds of scam-related cases. This collaboration reflects a broader shift — user asset protection is no longer confined to internal risk controls, but integrated into a wider societal anti-scam framework.

This long-term commitment has received continued external recognition:

• Awarded Singapore’s Anti-Scam Outstanding Community Contribution Award for the fourth consecutive year
• Recognised as an Outstanding Partner at the 2025 SaferSG National Security Conference
• Nominated for Virtual Asset Service Provider Compliance Team of the Year by Asian Legal Business for two consecutive years

Coinhako’s Head of Compliance, Glen Chee, has also been named Compliance Officer of the Year for two consecutive years and selected among ALB’s Top 15 Asia-Pacific Compliance Leaders. Within Coinhako, compliance is not viewed as a brake on growth, but as a framework that enables scale over time.

What Do Institutions Seek as Markets Mature?

As the industry matures, professional investors are shifting focus from short-term speculation toward structured yield, risk management and long-term allocation.

In 2025, Coinhako’s institutional business accelerated notably:

• Structured product trading volume grew over 450% year-on-year
• Options trading volume exceeded USD 1 billion
• Assets committed on Coinhako Earn, its institutional yield platform, surpassed USD 200 million

These trends reflect a broader role transition — from a pure trading venue to a provider of digital asset solutions for professional investors.

Beyond Trading: Infrastructure Is the Hardest Moat to Replicate

Clearing, liquidity and cross-border financial capabilities are becoming key differentiators.

If trade matching represents the “front-end” of crypto finance, then clearing, settlement and liquidity form its underlying operating system — often overlooked, yet difficult to replicate.

Over the past two years, Coinhako has supported more than USD 10 billion in crypto settlements, providing compliant and reliable transfer infrastructure for a growing base of Asia-Pacific institutional clients. The platform also acts as a crypto-native liquidity provider across multiple markets and venues, including TP ICAP Fusion.

As exchanges increasingly assume foundational market functions rather than simple order matching, competition is shifting away from features and fees toward system depth and infrastructure capability.

The Next Phase of Exchanges Is Not Just Trading

How crypto platforms evolve into financial infrastructure is now a central industry question.

Looking ahead to 2026, Coinhako plans to continue investing across three long-term priorities:

• Deepening regulatory cooperation while strengthening anti-scam and asset protection mechanisms
• Expanding institutional services with more mature trading and yield solutions
• Connecting on-chain and off-chain financial scenarios to support cross-border crypto infrastructure

The next phase of digital asset growth will not be defined solely by trading activity, but by its integration into real-world payment, settlement and cross-border capital flows.

Trust Is Re-emerging as the True Moat

As the industry enters a phase of structural competition, the scarcest resource may no longer be growth tactics, but lower trust costs.

Coinhako’s path may not suit every exchange, but it offers a clear case study: as markets institutionalise, compliance, security and infrastructure are redefining what a sustainable moat looks like.