A Guide to the Need for Transparency and Security in Crypto Exchange

Crypto ecosystem is under consistent evolution. But with great power comes great responsibility. With recent upheaval and unrest in the crypto world, more and more consumers are now looking for more transparency and security from the exchange platforms. Blockchain is here to stay, and for a good reason, but how can consumers make better decisions about which exchange platform to choose for their trading requirements? We have a guide ready for you: 

Choose regulated exchange platforms: The cryptocurrency market is quite delicate at the moment. The investors are losing trust as well as their money. With all the latest insolvency and bankruptcy hitting the news, investors are rightfully scared. But investors forget that all these fraudulent exchanges had one thing in common, lack of regulations. There were no laws regulating their functions or keeping the investors’ money safe. No regulations lead to chaos, and that chaos is what unfolded. 

Choose transparency: Another biggest issue that is plaguing the industry is trust. If the crypto exchange industry has to survive then it must build its foundations on trust. The industry is currently facing scams, a lack of transparency, and the threat of insolvency. The only way to restore this trust is through transparency and security. The exchanges are publishing proof-of-reserves to show their liquidity status and to build trust, but that’s just the bare minimum. It sends out a very clear message “Trust, don’t verify”. Without a thorough audit of the financials of the exchange platform, how can investors be sure of the security of the money and the stability of the exchange?

Choose security: Security embedded within the crypto exchange to secure the funds of the consumers, goes a long way in building trust amongst the investors. The exchanges need to get their basic right when it comes to the security of consumer funds if they wish to survive in the competitive crypto market. Two security features that provide an extra layer of security to the funds are two-factor authentication and account mapping to specific IP addresses. Two-factor authentication must be made mandatory for all customers. Firstly, these steps add an additional layer of security and, secondly, it negates the effect of malicious keyloggers and malware used by hackers through this added layer of security. With account mapping, the exchanges can inform or notify the user in the event of any suspicious activity or when his account is logged in from an unfamiliar location or device. 

Choose segregation of funds: Unregulated crypto exchanges do not segregate the company’s funds from consumer funds. This practice is dangerous as it gives the investors a false picture of the liquidity and security of funds. Investors should trust only the exchanges where they keep the consumer’s funds separate and that’s the only way the investors’ money is safe in case of insolvency, bankruptcy, or mismanagement within the exchange company. 

But can one exchange platform offer it all? LCX does. Here’s how LCX offers it all: 

LCX, Secure by law: Regulated, Transparent, and Safe Cryptocurrency Exchange 

In these uncertain times, investors need to look for regulated exchanges that can provide greater security for their funds. 

Regulated: LCX is regulated cryptocurrency exchange licensed by Liechtenstein’s FMA. LCX is one of the first cryptocurrency companies to receive approvals for 8 registrations from the Financial Market Authority (FMA) pursuant to the TVTG regulatory framework ( Token and Trusted Technology Service Provider Act). 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. 

Learn more about how LCX is regulated by law. 

Transparent: LCX’s financials are audited by an independent third-party auditor Grant Thorton as LCX is fully committed to the value of transparency in an exchange platform. Proof-of-reserve published by exchanges is just a half picture, LCX commits to the very idea of transparency by submitting to regular independent financial and security audits.  

Learn more about LCX’s Auditor

Secure: LCX offers investors a multitude of security options to keep their wallets and assets safe on the exchange platform, including two-factor authentication and account mapping.  The funds at LCX are safe and our team is fully committed to keeping the exchange free of hacks and scams and turning this community into a safe space for trading. One important way that exchanges can provide security for customer funds is by keeping them in segregated accounts that are protected from bankruptcy. This requirement ensures that customer funds are not used to cover the company’s losses in the event of bankruptcy, and provides greater protection for investors. 

Learn more about how LCX values foremost security and safety. 

Segregated Funds: LCX adheres to Liechtenstein blockchain laws in word and spirit. Thus, the consumer and company funds are segregated at LCX by law. The company cannot touch consumer funds in case of insolvency and bankruptcy. 

Conclusion

There is no dearth of crypto exchange platforms in the market today, but investors now should care more about laws and regulations than they did ever before. Regulations and laws bring safety and stability to the exchange platform. Risky investments don’t yield results for long.