Home CryptocurrencyAltcoin Here’s how centralized exchanges are trying to win back users after the FTX collapse

Here’s how centralized exchanges are trying to win back users after the FTX collapse

by SuperiorInvest

Centralized crypto exchanges play a huge role in the cryptocurrency trading ecosystem. However, the collapse of FTX showed how difficult it is to trust exchanges with user funds. Despite this, crypto trading platforms continue to believe that they can regain the trust of the community.

In an interview with Cointelegraph, executives from crypto exchanges OKX, Gate.io, and Bitpanda shared their insights on how trading platforms can recover from the effects of the FTX debacle.

According to Dion Guillaume, CEO of Gate.io, transparency when it comes to user asset management has become vital. Guillaume told Cointelegraph that this also motivated their platform to open source their proof-of-reserves method using Merkle Tree verification for other industry leaders to use. He explained that:

“I think it’s become increasingly clear over the last two weeks that crypto exchanges need to operate more transparently, especially when it comes to custodial user assets and Proof-of-Reserves.”

In addition, Guillaume also believes that the industry will be able to recover with 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 it will probably come back stronger than before,” he added.

Eric Demuth, co-founder and CEO of crypto exchange Bitpanda, called on exchanges to put customers first and be more transparent. “They need to stop trying to sell the dream,” he said. Demuth explained that:

“We need to stop telling people to trust us and give them a real reason to do so. Investors are not stupid and are now more suspicious of our industry than ever.”

Furthermore, Bitpanda’s CEO believes that the space will eventually recover from the effects of the FTX collapse. According to Demuth, there is no quick fix and the players left in the 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 OKX crypto exchange, also echoed the views on transparency. According to Lai, transparency is important in restoring user trust. The executive stressed the need to take action on both the retail and institutional fronts.

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 make themselves more visible to clients. He explained that:

“This self-verification feature means that even if we wanted to, there’s no way to collect user funds because we operate completely transparently.”

In addition, the OKX executive also highlighted the importance of self-custody. Lai noted that their firm believes in the motto “not your keys, not your crypto.” He said that the trading platform encourages users to take care of themselves their property.

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