A real look at the aftermath of the ‘crypto crash’ phenomenon suggests that most crypto exchange platforms are more like banks, except for platforms like Celsius Network and Voyager Digital.
Today, crypto exchange platforms market themselves as platforms for users to buy and sell cryptocurrencies. However, they also function as stock brokers, and are more concerned with their trading model somewhat resembling banking.
Traditional exchanges such as the New York Stock Exchange are seldom transparent because they do not offer account service, otherwise the customer will not face any loss. While, a brokerage firm such as Wealthsimple may be muflis, however, the customer portfolio will be held in the customer's own name and may be transferred to another broker.
The lack of transparency in the crypto market makes it easy for executives and promoters to be dumped before suspending spending. After the customer realizes that the money is gone, the responsible individual will spend the money with a neat profit.
At the micro level, crypto platforms should be controlled in the same way as brokers i.e. customer assets must be held separately, securely and with clear rules regarding risk exposure in the firm's own trading.
In addition, crypto assets must be clearly defined as security and subject to scrutiny. The exchange platform is required to store sufficient cash in the currency issued by the kingdom.
Most of the individuals who pass by entering the world of the crypto currency market are not rich investors but they are ordinary individuals who distrust banks and institutions. Therefore, most of these individuals will look for ways to protect themselves from inflation by entering the crypto market.
In this regard, rebuilding trust requires time and energy and requires preparation in dealing with inequality caused by an increase in the cost of living, including an extractive financial system. Effective regulations are also important in rebuilding trust.
Therefore, users and investors themselves need to wisely choose a crypto exchange platform to reduce the risk to their asset trading so as not to face problems in the future. DYOR.
