There’s no question that now’s the best time to build.
“Innovation front-runs regulations, always,” said Henry Liu, CEO of BTSE, during a crypto exchange roundtable at Taipei Blockchain Week 2022 on December 13. “However, it doesn’t mean regulations are a bad thing. Instead, we should be thinking, how do centralized exchanges get to the table and contribute to what the regulators are talking about? If you’re not at the table, you’re on the menu, right?”
This past week, three panelists representing centralized exchanges answered much-anticipated questions.
Moderated by Richard Chen, Founder of Iterative Ventures, this panel discussion included Henry Liu – CEO of BTSE, Winston Hsiao – Co-founder and CRO of XREX, and Josh Lu – Investment Strategy Director at BingX. The panelists shared their views on the possible future for centralized exchanges (CEXs) and how the industry’s landscape has changed after the FTX fallout.
Some Topics Discussed and Key Takeaways
- Proof of Reserves (PoR) and Proof of Solvency
- PoR gives verifiable proof to provide some customer assurance, but it does not take a company’s liabilities into account.
- Users need to keep in mind that it is not an accurate representation of a platform’s stability.
- The industry is in need of qualified auditors and standardization.
- However, global standards have yet to be defined, as every jurisdiction has its own set of standards when it comes to auditing.
- CEXs need to figure out the standards that comply with the regulations set forth for products and services offered in different regions.
- It is expected that greater oversight and stronger governance will be put in place in the coming years, which can be challenging for CEXs. But such oversight is vital to helping the industry regain mainstream trust.
- Similar to regional banks, exchanges should be regulated and governed in the regions they operate in.
- What to look out for when choosing an exchange to trade with
- “You want to trade with exchanges that have an open line of communication to you. That’s the start.” – Henry Liu, CEO of BTSE.
- Future outlook
- Users will still be looking for the next opportunity while being more careful and paying more attention to where their funds are being held.
- For all Web3 projects, infrastructure, etc, now is still the best time to build.
The panelists equally agreed with the notion that cryptocurrencies are no longer the new kid on the block. There are existing frameworks that the industry can follow and practices that one should not be doing.
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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.