By George Ward
Centralized exchanges are part of the growing crypto trading ecosystem as several firms increase their adoption and access to digital assets. However, with the collapse of FTX, it is becoming more difficult to trust crypto exchanges with users’ capital.
Despite the seeming disaffection with the continuous loss of customers’ funds due to bankruptcy issues, CEXs believe they can bring back the community’s trust in their platforms.
Recently, executives of several crypto exchanges, including OKX, Bitpanda, and Gate.io, explained their opinions on how each of them plans to restore their battered image following the impact of the FTX crisis.
A Gate.io executive, Dion Guillaume, noted that CEXs should put more effort into building transparency by showing the importance of users’ assets. According to Guillaume, this move will drive exchanges to show proof of having backup funds in the event of a liquidity crunch.
In addition, he also advocated for the adoption of the Merkle Tree verification method across the entire industry.
He added, “over the past couple of days, it has become necessary for crypto exchanges to ensure more transparency in their operations, particularly regarding the custody of user funds and proof of reserves.”
Aside from this, the Gate.io executive believes the industry can recover from the setback. He pointed out that other gloomy events have shown how resilient the sector can be in the past decade.
“It will take some time for the market to recover. But we are pretty sure it will come back stronger than ever,” Guillaume added.
Prioritizing Customers and Ensuring Transparency
For his part, the CEO of Bitpanda, Eric Demuth, wants exchanges to prioritize customers’ concerns. He also called for more transparency in crypto by stopping the notion of “selling a dream” to users.
Demuth said, “CEXs need to stop telling users to trust them; firms should give them a real reason for needing their trust. Investors are now more sensible and increasingly suspicious of the crypto industry than before.”
The CEO also echoed the belief that the space will likely recover from the FTX debacle. Demuth noted that there is no quick fix to the issue and that industry players must put in the effort to provide a sustainable and regulated future for the young industry.
In the view of Lennix Lai, an OKX executive, building a highly successful business requires transparency as users show their trust where there is one. Lai said that the players must take the necessary measures to ensure that regulations for both the retail and institutional fronts are duly implemented.
The executive added that retail crypto transactions drive digital currency adoption. But with transparency, users can verify that exchanges have enough reserves.
The OKX executive noted that CEXs must encourage users to use self-custody to safeguard their assets. It will be interesting to see how centralized crypto trading platforms can sway users back after a tremendous setback.