Today, crypto users around the world want more: more transparency, more protection, and more control. As decentralized platforms continue to rise, centralized exchanges are entering a pivotal era where adaptation is essential. To understand how the landscape is evolving, Olayimika Oyebanji speaks to Phemex CEO Federico Variola about emerging security challenges, evolving expectations around openness and trust, and the need for a user-centric approach in a rapidly changing market. Federico Variola Hello Federico, can you briefly tell us about yourself and your route to Web3? Hi, I’m Federico Variola, Chief Executive Officer and founding member of Phemex. I guide the company’s global expansion, product evolution, and institutional partnerships, with a clear vision: to build a user-first platform. My path into crypto began before Phemex. I studied International Politics,and developed an interest in game theory and cybersecurity, that shaped how I think about risk, trust, and system design. My PhD research focused on security, and that foundation still guides my leadership. Cybersecurity standards have improved, but crypto brings challenges that require rethinking traditional approaches, especially for decentralized technologies and high-speed markets. Today, I work to drive Phemex's mission as a forward-thinking crypto platform that puts users first. Beyond standard Proof-of-Reserves, what innovative transparency mechanisms or legal frameworks are essential to rebuild user trust across all centralized entities? Proof-of-Reserves is an important baseline, but only one part of real transparency. To rebuild trust in centralized entities, users need ways to verify that assets are properly held, protected, and governed. The foundation is continuous, verifiable transparency, not occasional reports. Users should be able to confirm balances anytime through cryptographic proofs like Merkle Tree verification, where hashed identifiers let them independently verify inclusion in total reserves. The second pillar is visibility into both assets and liabilities. Traditional PoR shows what an exchange holds, but without liabilities it’s incomplete. True transparency requires a full balance sheet: reserves, obligations, cold-storage allocations, and real-time liquidity. Third, custody transparency must be a legal and operational requirement. Users should know how funds are stored, what portion is in cold storage, how keys are managed and what governance approves movements. On our platform, over 70% of assets are in cold storage with Shamir Secret Sharing and AWS Nitro Enclaves, ensuring no single person or device can move funds. A fourth mechanism is independent verification — continuous validation by trusted third parties and public bug bounty programs that surface risks early. For long-term trust, transparency must be structural: continuous verification, full balance-sheet clarity, independent oversight, and open disclosure of strengths and vulnerabilities. When users can verify everything themselves, trust becomes a system feature, not a leap of faith. Looking at the global adoption curve, where is the greatest untapped potential for institutional or enterprise digital asset usage in the next two years: RWA tokenization, payments, or cross-border liquidity? To me, the biggest untapped opportunity for institutional adoption is stablecoin-based cross-border payments and liquidity. This category already has clear product-market fit and maturing regulatory frameworks, making it far more “deployment ready”. Stablecoins are moving from crypto-native use to early treasury and B2B pilots, offering faster settlement, lower fees, and better intraday liquidity than traditional rails. RWA tokenization is a major long-term opportunity — potentially the biggest market shift of the next decade — but remains in an earlier structural phase. Tokenized funds and money-market products are growing, yet broad institutional adoption relies on legal standards and market structure catching up. By contrast, stablecoin rails for global payments are already operational, increasingly regulated, and addressing corporate pain today. The "2025 security incident" was pivotal. What were the key lessons learned, and how did you leverage that experience to implement advanced protections like Shamir Secret Sharing and AWS Nitro Enclave? The January 2025 incident was pivotal because it exposed the limits of traditional, reactive security. Even without loss of user funds, it showed that relying on alerts, manual escalations, or post-mortems is inadequate in today’s threat landscape. It pushed us to redesign our architecture around prediction rather than response — evaluating every login, withdrawal, and behavioral pattern in real time. This shift let our systems automatically halt hundreds of suspicious withdrawals in the following months, proving prevention must occur before humans intervene. It also led us to reinforce core custody layers with Shamir Secret Sharing and AWS Nitro Enclaves. Shamir removes single points of failure by distributing key material, while Nitro Enclaves isolates sensitive operations. Combined with multi-layer wallet protection, real-time monitoring, automated SOAR response, and a strengthened security culture, these upgrades reshaped our approach. The result is a platform delivering 99.999% uptime with one of the industry’s most resilient security frameworks. How does the recent rebrand connect to the next phase of your product’s evolution, and what can users expect from your roadmap? While the rebranding introduces a new visual identity — a redesigned logo and more modern platform experience — it’s also tied to a major milestone: Phemex’s sixth anniversary. We have passed threshold metrics that change the stakes for product decisions. In 2025, the platform recorded 66% year-on-year global user growth, now serving 10+ million traders worldwide. Spot trading volumes grew 122%, futures trading volume increased 26%. These figures underscore a platform where performance, and clear user experience directly influence growth and trust. Looking toward next year, the roadmap is ambitious but focused. We are continuing to invest in the fundamentals: security, reliability, and performance. This includes predictive security innovations, system-architecture updates, and ensuring peak performance with near-zero downtime during intense global trading. On the product side, we’ll refine and expand core offerings — spot, futures, copy trading, and earn — while adding tools that simplify asset management. We’re also deepening our ecosystem with more on-chain integrations and features that give users greater control over digital assets. From a brand and community perspective, we aim to bring our user-first philosophy to more markets through localized campaigns, education, and stronger engagement. In short, the rebrand marks a new phase where product, security, and user experience evolve together under a unified identity. Having recorded massive growth last year, what is the single most aggressive, non-marketing investment being made to ensure this rapid scaling is sustainable regarding infrastructure resilience? The single largest non-marketing investment we are making is in deepening the user-first foundation Phemex was built on, through major upgrades in reliability, security, and performance. From the start, our belief has been simple:put users first and everything follows. As growth accelerates, the best way to honor that promise is by strengthening the core systems they rely on daily. That means continued investment in infrastructure resilience. We’re reinforcing the architecture that ensures seamless trading: near-zero downtime, smooth execution, and stability during global volatility. This includes enhanced predictive security models, more robust wallet protection and systems built to maintain 99.999% uptime as activity intensifies We’re also investing in the broader trading experience — smarter tools, smoother interfaces, and more intuitive design — because a user-first exchange must also feel effortless. We’re integrating on-chain analytics, cross-asset management, and AI-powered insights to support better decisions with less friction, while expanding education, and community programs to support traders at every stage. So the single biggest investment is this: building an infrastructure that scales responsibly while keeping the user at the center of every decision, making rapid growth sustainable through a stronger, more reliable experience for all. How does your platform's architecture and compliance specifically cater to high-volume institutional traders, and how does this segment fit your retail-focused strategy? Phemex’s institutional offering is built on the same foundation as our retail platform — high-performance infrastructure, deep liquidity, and security-first architecture — optimized for large deposits and high-volume execution. Institutional clients get a real-time system with low-latency APIs, unlimited sub-accounts, and capital-efficient structures for sophisticated strategies. Our custody framework, using hierarchical deterministic cold wallets and updated Proof-of-Reserves, protects assets at scale, while 99.99% uptime and dedicated support ensure uninterrupted trading. Institutional-grade performance lifts the entire platform. Investments in resilience, stability, and security for institutions directly improve retail — faster execution, stronger reliability, safer custody, and smoother trading. For us, supporting institutions extends the same principle: every user deserves world-class protection and performance. Your roadmap includes AI-powered tools across trading. What is the core problem AI is solving for the average retail trader, and how do you ensure these tools remain empowering rather than overly prescriptive? AI addresses a core challenge for retail traders: crypto markets generate more data and move faster than any individual can track. AI closes that gap by filtering noise, spotting patterns humans miss, and surfacing real-time insights traders can act on — essentially bringing institutional-grade analysis to everyday users. And because we already use AI in our security architecture to predict and stop threats, we’ve seen how powerful it is when built to protect and support users. As we expand AI into our trading experience, our goal isn’t to replace human judgment but to enhance it. These features will provide insights, context, and real-time guidance while keeping users fully in control. Following our user-first philosophy, AI should simplify trading, support better decisions, and reduce friction, without becoming prescriptive or taking agency away from the trader.

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Beyond PoR: Phemex CEO on Building Structural Trust for the Next Decade of Crypto

Beyond PoR: Phemex CEO on Building Structural Trust for the Next Decade of Crypto

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