In the current market environment, where unregulated crypto exchanges’ bankruptcy and insolvency are rising, the demand for centralized exchange regulations and laws is increasing. The centralized exchange market is largely unregulated or self-regulated, and with recent events that have come to light, customers are subject to fear. The fears aren’t completely unfounded, since bankruptcies and the freezing of funds are on the rise.
But why are the users on the receiving end of policy failures within the crypto exchange? Well, the absence of regulations has played a major role here. Since many crypto exchanges were left largely unregulated, many have operated on risky models, leading to severe liquidity problems.
Irrespective of the setbacks to the crypto ecosystem due to these unregulated exchanges, centralized exchanges like LCX are working to keep the values of integrity, transparency, and security alive within the industry. Exchange operations should be regulated and transparent, and LCX is trying to lead by example. Here are six principles that will help keep centralized exchanges safe and secure for users:
Provides safety for assets: Exchanges must be risk-averse when dealing with consumer funds. Security protocols need to be in place to protect consumer funds from hacks, scams, and bankruptcy. LCX is benevolently committed to ensuring the safety of its assets for its customers. LCX offers its consumers a multitude of security options to keep their assets safe on the exchange platform, including two-factor authentication and account mapping. The consumer funds at LCX are safe, and our team is fully committed to keeping the exchange a safe space for trading.
Learn more about how LCX prioritizes security and safety.
Maintains segregation of funds: The protection of user funds is the key to a transparent and secure exchange. User funds must never be traded or invested. LCX adheres to Liechtenstein blockchain laws in word and spirit. Thus, consumer and company funds are segregated at LCX by law. The company cannot touch consumer funds in the event of insolvency or bankruptcy.
Follow regulations and blockchain laws: Unregulated exchanges are risky and unsafe investment avenues. No laws could protect the user’s funds if unregulated exchanges fell prey to insolvency or bankruptcy. But since LCX is a regulated cryptocurrency exchange licensed by Liechtenstein’s FMA, LCX is, by law and through its embedded values, committed to providing the highest level of security for our customers, and we will continue to adhere to all relevant regulatory requirements. LCX is one of the first cryptocurrency companies to receive approvals for eight registrations from the Financial Market Authority (FMA) under the TVTG regulatory framework ( Token and Trusted Technology Service Provider Act).
Submits to regular independent audits: Recently, the unregulated exchanges have been racing to publish the proof-of-reserves, but that is just half the picture. LCX believes in total transparency, and thus, LCX submits to regular independent audits to further enhance transparency and security. LCX’s financials are audited by Grant Thornton and NSF Services Trust. All LCX financials, including proof of customer funds and proof of reserves, are thoroughly audited.
Strengthens and enforces security protocols: Due to the fast-evolving nature of the industry, the exchanges need to step up and adhere to higher security protocols for enhanced fund and data safety. LCX has always placed a high value on safety and security. LCX guarantees the proactive implementation of systems and checks to facilitate trade safely and securely. LCX worked with Hacken to conduct a comprehensive cyber security assessment and has received the highest rating. To learn more, consider LCX as one of the top-certified exchanges in the world for safety and security. Also, as a regulated cryptocurrency exchange, LCX is subject to the same supervision standards and compliance due diligence (KYC and AML) rules as a financial institution or licensed bank.
Conclusion
As a regulated exchange committed to the values of security, transparency, and the safety of funds and data, regulations and laws provide them an edge over unregulated exchanges in the crypto market. These commitments will be the bedrock of crypto exchange success in the near future.
