These are exciting and troubling times for the cryptocurrency industry. Hundreds of new assets are introduced to the market every single month. This makes it difficult for investors to determine which projects are potentially worthwhile. Dunamu CEO Lee Sir-goo is convinced exchanges need to take matters into their own hands in this regard.
Separating the Wheat From the Chaff
There is no shortage of cryptocurrencies and digital assets. Several thousands of projects are all competing for traction. It has become very difficult for investors to discern if projects are scams or perfectly legitimate. There is a growing need for intervention in this regard. Something needs to change prior to more people losing money due to nefarious projects.
Coming up with a solution to tackle this problem is very difficult. For exchanges, a screening process is more than warranted. Rather than listing coins and assets willy-nilly, implementing a review process will improve the industry as a whole. Not all platforms are taking such measures at this time. In fact, some exchanges use questionable methods to gain a competitive edge in this day and age.
Lee Sir-goo, CEO of Upbit’s parent company, Dunamu, has a clear vision in this regard. He claims any responsible exchange can improve its selection process. Stock exchanges maintain very strict rules in this regard as well. It is only normal that cryptocurrency trading platforms implement similar measures over time.
Will Exchanges Take Precautions?
Although the concept outlined by Sir-goo makes sense, it remains up to trading platforms to introduce such changes. Simply relying on teams paying listing fees will not make the industry more appealing to investors. Especially now that cryptocurrency is gaining traction among institutional investors, a clearly defined system becomes all the more important.
Lee says:
Stock exchanges like the Kosdaq and Nasdaq all have strict guidelines to determine which company stocks they handle, to protect investors. The same goes for cryptocurrency exchanges.
There are more than 20,000 crypto coins existing around the world today. It’s one way to list any coin as long as a listing fee is paid. But I believe the role of a crypto exchange is to screen for and pick out which is a good blockchain business and token, with aims to help users find the best investment opportunities.
Exchanges supporting fiat transactions need to fulfill an exemplary role in this regard. Upbit is one of those platforms providing such trading options. Their main priority is to prevent money laundering and other criminal activity. This also means they may need to pass up on listing profitable cryptocurrencies in terms of trading revenue. However, the firm prioritizes the protection of its users above everything else.
Thoroughly vetting new assets can also aid in regulatory efforts. Governments are still wary of cryptocurrency exchanges, for a wide variety of reasons. A streamlined system to trade and list assets can make a world of difference in this regard. Now that regulatory discussions are taking center stage, a proactive approach by exchanges appears warranted.
Do you think exchanges should be more critical of the coins they list? Let us know in the comments below.
Images courtesy of Shutterstock.