Centralized cryptocurrency exchanges play a very important role in the cryptocurrency trading ecosystem. Nevertheless, the FTX crash demonstrated how difficult it is to trust exchanges with user funds. Despite this, cryptocurrency trading platforms continue to believe that they can win back the trust of the community.
Speaking to Cointelegraph, executives from cryptocurrency exchanges OKX, Gate.io, and Bitpanda shared their thoughts on how trading platforms can recover from the effects of the FTX debacle.
According to Dion Guillaume, Gate.io executive, transparency regarding the custody of user assets has become vitally important. Guillaume told Cointelegraph that this also motivated the platform to open up its proof of reserves method using Merkle Tree verification to make it available for other industry leaders to use. He explained:
“I think in the last couple of weeks it has become increasingly apparent that cryptocurrency exchanges need to operate with more transparency, especially around the custody of user assets and proof of reserves.”
Apart from this, Guillaume also believes that the industry will be able to recover in time. Pointing to other black swan events, the executive noted that the cryptocurrency industry has remained resilient over the past decade. “The market may take time to recover, but it will probably come back stronger than before”he added.
Eric Demuth, co-founder and CEO of cryptocurrency exchange Bitpanda, called on exchanges to put customers first and be more transparent. “You have to stop trying to sell a dream,” he said. Demuth explained:
“We need to stop telling people to trust us and give them a real reason to. Investors are not stupid and now they are more suspicious of our industry than ever.”
Apart from this, the Bitpanda CEO believes that the space will eventually recover from the effects of the FTX crash. According to Demuth, noor there is a quick fix, and the remaining players in the space must continue to work towards a regulated and responsible sustainable future.
Lennix Lai, an executive at cryptocurrency exchange OKX, also echoed sentiments on transparency. According to Lai, transparency is important to rebuild user trust. The executive stressed that measures must be taken both on the retail and institutional fronts.
At the retailer, Lai noted the importance of allowing users to self-verify that assets are 100% backed by reserves. In the institutional sphere, the manager pointed out that organizations must find ways to give customers greater visibility. He explained:
“This self-verification feature means that even if we wanted to, there would be no way for us to mix up user funds as we are operating in full transparency.”
Apart from this, the OKX executive also highlighted the importance of self-custody. Lai noted that the company believes in the motto “it’s not your keys, it’s not your cryptocurrency.”. He said that the trading platform encourages users to self-custody their assets.
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