Centralized crypto exchanges play a huge role in the crypto trading ecosystem. However, the collapse of FTX has shown how difficult it is to trust trading with user funds. Despite this, crypto trading platforms continue to believe that they can regain the trust of the community.
Speaking to Cointelegraph, leaders of crypto 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, an executive at Gate.io, transparency in the custody of user assets has become vitally important. Guillaume told Cointelegraph that this also motivated their platform to open up their proof of reserves method using Merkle Tree verification to be available to other industry leaders. He explained that:
“I think over the past couple of weeks it has become increasingly clear that crypto exchanges need to operate with more transparency, particularly around the custody of user assets and proof of reserves.”
Other than that, Guillaume also believes the industry will be able to recover in time. Highlighting other “black swan” events, the executive noted that the crypto industry has remained resilient over the past decade. “The market may take a while to recover, but it will likely come back stronger than before,” he added.
Eric Demuth, co-founder and CEO of crypto exchange Bitpanda, called on exchanges to prioritize customers and be more transparent. “They have to stop trying to sell a dream,” he said. Demuth explained that:
“We need to stop telling people to trust us and give them a real reason to. Investors are not stupid and they are more suspicious of our industry than ever.
Other than that, the CEO of Bitpanda believes that the space will eventually recover from the effects of FTX’s collapse. According to Demuth, there is no silver bullet and those players who remain in the space must continue to work towards a sustainable, regulated and responsible future.
Lennix Lai, an executive at crypto exchange OKX, also echoed sentiments on transparency. According to Lai, transparency is important to restore user trust. The executive emphasized that action needs to be taken on both the retail front and the institutional front.
In retail, Lai stressed the importance of allowing users to verify for themselves that assets are 100% backed by reserves. On the institutional side, the executive noted that organizations need to find ways to give greater visibility to customers. He explained that:
“This self-verification feature means that even if we wanted to, there would be no way for us to mix user funds since we operate in complete transparency.”
Apart from this, the OKX exec also emphasized the importance of self-guard. Lai noted that their company believes in the motto “not your keys, not your crypto.” He said that the trading platform encourages users to self-guard their assets.