Momentum Building in the Crypto Markets
The crypto markets are gaining momentum, attracting new investors and exchanges. However, it’s crucial to determine the stability and liquidity of an exchange before getting involved. The catastrophic failures of previous market cycles raise concerns about bad actors in the industry.
The SEC’s FOMO Warnings
2024 holds significant potential for the crypto market, with the Bitcoin ETF approval and the upcoming halving. In preparation for an influx of new investors, the SEC has started warning retail buyers about FOMO. They caution people against falling for investment campaigns promoted by celebrities and influencers.
FTX’s Deceptive Practices
The SEC’s warning could be referring to FTX, a crypto exchange that heavily relied on A-list celebrities for promotion. It’s now clear that FTX was involved in a scam, using famous individuals to gain credibility while defrauding customers.
A History of Exchanges Gone Wrong
FTX is just one example of the many incidents involving centralized exchanges. Other cases include the infamous Mt.Gox hack and allegations of theft and embezzlement against the Canadian exchange Quadriga CX. Crypto exchange Cryptopia also faced internal failings and eventually collapsed.
The Need for Improved Practices
SBF’s legal troubles and the increasing regulation of the industry serve as a warning for firms to improve their practices. However, crypto remains unregulated in many parts of the world, and customers often struggle to recover their funds through lawsuits.
Bringing Banking Best Practices to Crypto
As the crypto market enters a new bull market, it’s essential to protect yourself from bad actors. Established and regulated crypto trading firms like MultiBank Group can provide a safer trading experience. MultiBank Group holds licenses from various authorities and offers segregated wallets for secure fund storage.
Trusting TradFi and Crypto-Native Exchanges
Exchanges with backgrounds in traditional finance (TradFi) demonstrate a commitment to fund protection. Coinbase, the first publicly listed crypto exchange, and Bitstamp, which formed a partnership with a French banking giant, are prime examples. Users now have more reliable options when choosing an exchange that prioritizes compliance and user trust.
Hot Take: Choosing Safety in the Crypto Market
As the crypto market matures, it becomes harder for new exchanges to survive. However, this also means users have better options to safeguard their funds. Whether an exchange has a TradFi background or is a crypto-native, companies that prioritize compliance and user trust should be the go-to choice for fund safety.
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