Centralized crypto exchanges play a huge role in the crypto trading ecosystem. However, the collapse of FTX has demonstrated how difficult it is for exchanges to trust user funds. Despite this, crypto trading platforms continue to believe they can win back the trust of the community.
Speaking to , the heads of crypto exchanges OKX, Gate.io and Bitpanda shared their views on how trading platforms can recover from the aftermath of the FTX debacle.
According to Dion Guillaume, CEO of Gate.io, transparency in terms of holding user assets has become vital. Guillaume told that it also prompted their platform to open-source their method for verifying reserves using Merkle tree verification so that other industry leaders can use it. He explained that:
“I think over the past two weeks it has become more and more clear that cryptocurrency exchanges need to operate with more transparency, especially with regards to holding user assets and proof of reserves.”
In addition, Guillaume also believes that the industry will be able to recover over time. Pointing to other black swan events, the executive noted that the crypto industry has remained resilient over the past decade. “The market may take some time to recover, but will most likely come back stronger than before,” he added.
Eric Demuth, co-founder and CEO of crypto exchange Bitpanda, urged exchanges to prioritize customers and be more transparent. “They should stop trying to sell the dream,” he said. Demuth explained that:
“We have to stop convincing people to trust us and give them a real reason to do so. Investors are not stupid, and now they are more suspicious of our industry than ever.”
In addition, the Bitpanda CEO believes that the space will eventually recover from the effects of the FTX collapse. There is no quick fix, Demuth said, and players left in space must continue to work towards a sustainable, regulated and responsible future.
Related: CoinMarketCap Launches Proof-of-Reserve Tracker for Crypto Exchanges
Lennix Lai, CEO of cryptocurrency exchange OKX, also echoed the sentiment about transparency. Transparency is important for restoring user trust, Lai said. The Executive Director stressed that action is needed on both the retail and institutional fronts.
In retail, Lai pointed to the importance of giving users the opportunity to verify for themselves that assets are 100% backed by reserves. On the institutional side, the leader noted that organizations need to find ways to make clients more visible. He explained that:
“This self-verification feature means that even if we wanted to, we wouldn’t have the ability to collect user funds as we operate with complete transparency.”
Apart from this, the head of OKX also emphasized the importance of self-control. Lai noted that their firm believes in the motto “not your keys, not your cryptocurrency.” He said that the trading platform encourages users to store their assets on their own.