Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency discussions => Topic started by: CryptoTalisman on April 11, 2024, 09:12:38 PM
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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 (https://www.binance.com/en/proof-of-reserves)
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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.
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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.
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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.
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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.
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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 (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
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Regular audits of central exchanges will build user confidence and increase transparency. There are many exchangers that can be scammed by scammers. They will never get any such opportunity if they are regularly monitored there. Moreover, even if there are any errors, it will be revealed. If a special organization is formed to carry out this operation, it can definitely have a good effect. If the SEC tries to fulfill this responsibility itself, there will be a lot of controversy because it is now known to many investors as a corrupt institution. But overall, with the audit system properly managed, there will definitely be benefits to the common investors.
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Agreed... that seems to be able to minimize the chaos that FTX did. An audit will clearly ensure that the exchange's quality is maintained provided that the party carrying out the audit must have good credibility and be neutral. And this could become a new security standard for an exchange to prevent problems such as fraud or embezzlement of funds.
Cryptocurrencies are often used as a cover for fraud, therefore extra supervision is needed apart from tokens or coins, as well as from exchanges so that they have a valid security status.
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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.
That's a good thought, but my question is who will audit the exchange, there are a number of good audit firms but projects have known them very well, and they easily make changes in their structure in order to pass them. But my concerns here are if another firm/third party will audit the CEX so that it would be known to the public that something fishy is happening, then how you can say audit helps us to know our gains, and losses and make strategic moves to avoid the loss.
As these are done by third parties and if not then should be, and they should serve the purpose of bringing the truth of the exchange in front of us, not to help them make strategic moves so that they could cover there aces. And yeah if a proper audit is done on FTX which they did by themselves and tampered it with fake numbers to avoid people's reaction.
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Quarterly seems like its a lot if you ask me. Maybe twice a year? I mean even once a year in a good situation would work if they pick a trusted good audit company. If they do that then we are going to definitely see them do fine, it shouldn't really be that bad. I think quarterly would make sense and I think that should be something that could mean something for everyone to be fair. I think that's the most important part and I feel like that could mean a good increase eventually. Thats my guess at least and I feel like doing something way too much could cause a lot of trouble for them if they are careless.
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Shouldn't this come from the regulators? I think if you are acquiring a VASP license in a certain country, you should know that it will be about auditing and making sure that there's no way that you would be able to scam someone who would use the service.
Quarterly is a great timeframe already.
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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.
This is quite Affirmative. Background/Integrity check is very important just have you have started. Never thought of that angle. No one runs a bank without proper lincensing but the challenge in crypto for now is we dont have a body to regulate and enforce any compliance for now hence our best option is to check the past record of the exchanges we use.
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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.
Actually Bitget has been in the news for so many good reasons lately and if they can continue with that moment, they could be the next household name crypto exchange like Binance
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Audits are usually positive when making certain assessments of possible risks, but not always. Something better, and that would give greater credibility and reputation to any exchange, is to deposit all guaranteed deposits (although not all exchanges have it) in an external escrow. The problem with exchanges themselves protecting their own collateral funds is that, in the event of a collapse, those funds can also disappear. If it is an external escrow that is guarding those funds there should be no problem, and users affected by the exchange's bankruptcy could receive all the lost funds, and they could continue with their trading activities.
Something like this could have prevented, at least in part, many of the disasters we have seen in the industry. But I am almost 100% sure that no exchange would be willing to allow another company to protect its reserve funds. And the answer is very simple.
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It seems that if the audit were more detailed and technically formal, some countries might have done it. I'm not sure which ones. but if it is an audit to implement transparency and avoid various possible bad things like what happened to FTX, the state may be able to be the agent. and indeed this audit is meaningful for CEX, right?
Carrying out this audit also means that the exchange already has a license from a regulated and trusted institution. In this case, each country [asit has its own institutions. And like here, every exchange is required to carry out audits from several platforms, institutions and others which are of course trustworthy. such as: Certified Information Systems Auditor (CISA), Certified Information Systems Security Professional (CISSP), and various other audits that are possible and required. because, the audit system turns out not only on assets but also on the technique to guarantee that an exchange is still viable and provides security guarantees for its users.
However, when it comes to time, audits are usually carried out throughout the year, right> yearly? Or if necessary, maybe it will be 6 months later. because the audit system is not easy and requires various complex things and detailed data. But usually if exchange reporting is done, it can be done monthly, right?
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Something like this could have prevented, at least in part, many of the disasters we have seen in the industry. But I am almost 100% sure that no exchange would be willing to allow another company to protect its reserve funds. And the answer is very simple.
Of the most popular mechanisms, perhaps instead of entrusting money to someone else, it is better to insure it to prevent something bad from happening. Indeed, this seems to have several loopholes to keep losing, but at least it minimizes the damage received by the stock exchange.
In relation to credibility and also the assessment of the party conducting the audit, I think there is a connection. And the trust of users at large is the main reason for assessing exchanges based on audit results so this also brings in many new users too. So, there will always be a relationship between the audit results and also the sustainability of the exchange platform to become the main choice of crypto users.
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I believe this should be the standard, although implementation will face some troubles. If you can't find any trusted auditor I'm not sure if it still has any value though. If that happens, reports can mean nothing, fake, etc. Not sure how the government in your area is doing, but people in my country find it hard to trust the government to do anything properly, while any NGO has little to no power to run independently and do anything meaningful. So that's that.
That being said, even if we can find one, I'd still be skeptical of the accuracy of such reports and would assume that the data is true for the security of the past. I'd still assume that the exchange can lose their money easily for the next quarter so I'd never store money there far longer than necessary.
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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.
Actually Bitget has been in the news for so many good reasons lately and if they can continue with that moment, they could be the next household name crypto exchange like Binance
Through, just saw a report about their spot Volume increase last month.🤩
(https://i.ibb.co/YW2kpK3/20240416-203545.jpg) (https://ibb.co/thBs8N4)
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This would work for people who trust such things, i believe if it is done by a third party, you still have to trust the auditing firm and the exchange can also manipulate things in order to balance the books. I might be kind of paranoid here, but if the auditing if for people to have trust in them and store their funds in centralized exchanges, then it is a no for me.
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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.
All of us will agree on this we as a customer have the right to know if the exchange is still good and the regulator should protect the investor and traders' interest if this is done at a specific time many investors' money will be saved that's how they do in the banking system I think its better that the regulators do this.
Of course, there is a possibility of manipulation by the exchange to show that they can sustain their operation but it's in the hands of the regulators on how to address this issue and the regulator should be worth the trust of the traders and exchange to make the decision.
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I believe that auditing quarterly is acceptable because doing it on a daily basis would be a waste of time. However, checking quarterly does not imply that we cannot discover any questionable conduct on an exchange anytime. There are many traders who are skilled in technical and can detect fraudulent activities on an exchange. Aside from that, exchanges will not do so since they generate money from transaction fees and are registered with the SEC. That is, if they make a terrible decision, their identity will be exposed on the SEC.
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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.
it all depends on what their policies says concerning this, they may wish to go by their audit on a weekly or monthly basis, and if they also so wishes to make it quarterly or twice a year, its their own decision, but at least, i know doing such will help them a lot in making activity track of their progress over time and keep their record on performance, this will also help them to know if they are having a drop down at a certain point and then they can reevaluate themself.
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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.
Most of the crypto exchanges are incorporated in extremely lax legal havens where it would be basically impossible for bodies like SEC or FCA to force them to conduct an audit of their assets at all, let alone quarterly.
You have all these exchanges incorporated in Malta, Seychelles, Cyprus, various islands around the world, and others where the amount of financial regulation is near zero. That's how they are able to keep getting away with doing shady things to your money.
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Of course, it is necessary to conduct regular CEX audits, but not on a quarterly basis, because this requires a lot of work and time and requires companies specialized in financial audits or government agencies. Twice a year is enough.
I expect that the issue is not that simple and requires regulatory laws in the first place. Yes, auditing and review gives some confidence and security to users, but this does not prevent manipulation from occurring at any time, as has often happened.