Should crypto exchanges be audited quarterly?

[CryptoTalisman]

I don't know if my thought is 100% right but I think if exchanges give accounts of their activities and progress made on a quarterly basis, it will further consolidate the trust users have in the exchange and give users the direction the exchange is headed either positively or negatively.

We could see in the traditional sector like banks where auditing are done on a  quarterly basis to know their gains and how to better strategize for incoming quarters should there be any loses or things to worry about.

The collapse of FTX wasn't as a result of a single dealing but continuous spending without having a proper documentation of what the exchange truly worth.

Personally, I think auditing a CEX on a quarterly basis will help users make informed decision of whether to continue using a particular CEX or find a better alternatives. I will like your thought on this subject matter.

[Ambatman]

Yes it would. Auditing would show transparency and build customers trust on the exchange and knowing which exchange is going well and doing bad. Despite it been good and sort after by customer, it's not really easy to undergo a full auditing. Not all experienced accountant can audit a crypto firm due to their volatility and not to mention auditing is not something a small exchange can continuously afford every 3 months.

Besides who's gonna be in charge of this auditing. Should the SEC provide an auditor?  Personally don't trust them or to be specific  I don't trust Gary not to make wave in a way that would affect the market.
Should the auditor be sort out by the exchange?  I still don't trust such result. Corruption exists. If there's some kind of a body to run this unbiasedly and maybe under the government to reduce the cost in the exchange,  it would be good.

[electronicash]

its good to be edited once and then their wallet just need to be public because people will keep watching it, maybe sends some signals whenever there is activity going on in their wallets.

if there really is the need for transparency, the community i think will need a new regulatory board to review and audit. SEC is just too corrupt to make these auditing.
the first exchange to check i think is BGB, a fast rising one. it outrank exchanges that have been round for years. its suspicious.

[TomPluz]

I think auditing a CEX on a quarterly basis will help users make informed decision of whether to continue using a particular CEX or find a better alternatives. I will like your thought on this subject matter.

There is a big need for regular, credible and transparent audit for all the CEX doing business in the cryptocurrency market...and this should have been established many years ago. I am not so sure though what kind of reporting are CEXs doing these days to comply with regulatory concerns most especially those doing business in USA where we can find stricter laws protecting the investors and consumers. One big challenge is if a CEX is based on an offshore country where there is no strict law requiring them to submit an audited reports regularly...and I think we have seen this with all the harrowing stories surrounding Sam Bankman-Fried and his FTX. I think we should be demanding this from the CEXs we are doing business with and only use those who are certified to be compliant. While I am not favorable with using laws to kill innovations, I do agree that we need to make sure that accountability and transparency should be the norm of the cryptocurrency industry so that scammers and fraudsters will not be making residence with us.

[0t3p0t]

Yeah I think they need to be transparent on the status about the particular platform or exchange and it should be mandatory for all of them just to ensure the security of it's users. I think if this happens SEC will make move about their next action if they see something irregular or something that might be advantageous to those corrupt authorities.

[bounceback]

Sure its very requirement, every exchange need audit and transparence about their financial condition to avoid bad thing in the future such as FTX scam many costumer. All exchange need transparent about their condition currently and have to explain for us the road map rule for several years later and their back up recovery will enough for running the exchange website keep secure for longer time or not?
Exchange audit is very required exactly with their team advice, some exchange got trouble after their team advice make cheat and the exchange never responsibility when their own mistake with hack cases to refund to user fund.

[Zed0X]

This is easier said than done. You can conduct a regular audit when there are already specific international standards set for crypto that auditing firms must follow. As it stands, there is none or I don't know any. Maybe the US and European countries can enforce this because they are usually the pioneers.

[MCcabe Rory]

I don't know if my thought is 100% right but I think if exchanges give accounts of their activities and progress made on a quarterly basis, it will further consolidate the trust users have in the exchange and give users the direction the exchange is headed either positively or negatively.

We could see in the traditional sector like banks where auditing are done on a  quarterly basis to know their gains and how to better strategize for incoming quarters should there be any loses or things to worry about.

The collapse of FTX wasn't as a result of a single dealing but continuous spending without having a proper documentation of what the exchange truly worth.

Personally, I think auditing a CEX on a quarterly basis will help users make informed decision of whether to continue using a particular CEX or find a better alternatives. I will like your thought on this subject matter.

I think after the FTX saga, some platforms have started disclosing their Proof of Reserves and making it accessible. It's a good practice, in my opinion, to show transparency, accountability, and to ensure that their users trust them. Besides exchange reports, I've noticed that some crypto news forums tend to provide insights into exchange affairs, progress, or declines over the months, just like this https://cointelegraph.com/news/bitget-exchange-volume-tops-1-6-trillion-q1. I believe there should be more accountability and transparency, especially regarding cex

[Lucius]

First of all, I think that in addition to regular audits, the criteria for starting centralized exchanges should be tightened to the extent that not everyone who considers himself capable of such a job can open them.

If, for example, someone did a serious check on Sam Bankman, he could very easily conclude that he is not a person who should be given the opportunity to deal with anything related to finance - the man is incapable of uttering two meaningful sentences, and they gave him an opportunity to embezzle billions $.

Therefore, audits should be at least twice a year, and the license to start such a business should be equal to starting a bank.

[MrSpasybo]

I don't know if my thought is 100% right but I think if exchanges give accounts of their activities and progress made on a quarterly basis, it will further consolidate the trust users have in the exchange and give users the direction the exchange is headed either positively or negatively.

We could see in the traditional sector like banks where auditing are done on a  quarterly basis to know their gains and how to better strategize for incoming quarters should there be any loses or things to worry about.

The collapse of FTX wasn't as a result of a single dealing but continuous spending without having a proper documentation of what the exchange truly worth.

Personally, I think auditing a CEX on a quarterly basis will help users make informed decision of whether to continue using a particular CEX or find a better alternatives. I will like your thought on this subject matter.

The audit covers two main aspects: reserve proof and source code. I think you are referring to the reserve proof of CEXs to ensure that they are actually holding user assets instead of misusing them as in the FTX collapse. Currently, many CEXs are providing regular reserve proofs, for example Binance has monthly reserve proofs instead of quarterly ^[1].

I hope that in the future, large auditing firms can participate to increase the credibility of these reports and help users feel more secure when storing their crypto assets on CEXs.
[1] Binance: Proof of Reserves

[Vx1]

In my opinion, it is enough to audit crypto exchanges once a year, not too often because audits also take time and money. 
This audit is good, because it can increase public trust in a crypto exchange.  This can also minimize violations that can be committed by a crypto exchange.

[Gurujebs]

Personally, I think auditing a CEX on a quarterly basis will help users make informed decision of whether to continue using a particular CEX or find a better alternatives. I will like your thought on this subject matter.

This is making me to remember how dramatic the crypto market became in the last December after FTX collapse around October. All of a sudden, there was FUD by some groups of some guys making people to panic, they first started from Kucoin, left to Binance, Crypto dot com and Okex but this exchange didn't fail, don't know what their intensions were with the FUD but none of the exchange collapse.

My personal advice on the subject is this. It's not a most that one must keep coins on exchanges, it's not even advisable. If you hold your coins on your wallet, you will least worry about what happens on the exchanges. Keep your coins on your wallet, period.

[SamReomo]

Yes, it seems like a good idea to me because auditing of such exchanges will be helpful for many users who don't want to lose their savings when such exchanges get bankrupt. But, it's easy in theory and hard in practical to do something like that.

I guess a better way to protect users from such exchanges is to audit them twice a year as that could be a much viable option and most exchanges won't hesitate to allow such kind of audits. It could be tough to audit exchanges on quarterly basis but it won't be tough to audit them twice a year.

[hugeblack]

To whom will these reports be submitted and who will review them? If they are not submitted to entities that have regulatory powers or reviewed by accounting auditing companies, all that will happen is more misleading and deceiving customers that their money is safe.

[Best]

its good to be edited once and then their wallet just need to be public because people will keep watching it, maybe sends some signals whenever there is activity going on in their wallets.

if there really is the need for transparency, the community i think will need a new regulatory board to review and audit. SEC is just too corrupt to make these auditing.
the first exchange to check i think is BGB, a fast rising one. it outrank exchanges that have been round for years. its suspicious.

Hmm.. You're right, it is ok if the cex gets investigated but from my research I think their token deserve the surge. I mean it is true I'm using the cex but I wouldn't give them the praise either but let's stick to the fact. If an exchange is doing what is right in no time you would see people picking interest. Let's say like Project token.. No one would want to repeat the same mistake they did in FTX

Here is a tip to know most things about the exchange history and other exchanges too.
https://www.bitdegree.org/top-crypto-exchanges/bitget..

And is quite interesting to know that Bybit came in 2018, same with the exchange and then Kucoin 2017. There's no much difference. I'll always advice we do monthly checking on the exchange we use. I do that for Binance, that's why I wasn't scared when SEC were fudding