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Forkast.News

The FTX scandal continues sending shock waves throughout the cryptocurrency industry.
Few could have predicted that the highly-regarded centralised exchange (CEX) would implode, leaving vulnerable retail investors to bear the brunt of the catastrophe.
Thousands of FTX users were unable to pull their funds off of the exchange when insolvency rumours began to swell, and now may never be refunded. The collapse has underscored the vital importance for cryptocurrency users to be able to transact quickly and efficiently across platforms.
So what’s next for the cryptocurrency industry? CEXs adopting “proof of reserves” is simply not enough to win back users. In order to restore user trust, there are a few important steps that platforms can, and must, take.
In light of the uncertainty of centralised finance (CeFi), users need ways to transact and move funds with ease and security more than ever before. Individuals must be empowered to take control of their cryptocurrency keys.

While CEXs are convenient and boast a superior user experience, they should not be used to house long-term investments. Amid the FTX fallout, we are witnessing a massive migration from CeFi to decentralised finance (DeFi), but in order to both on-board and retain users, there must be assurances that they will be able to securely off-ramp and withdraw assets quickly.
Uptick in DeFi user activity post-FTX
Cryptocurrency users are transacting at heavy volumes in the wake of the FTX disaster, seeking out safe harbours for their assets.
For example, Uniswap – one of DeFi’s most popular decentralised exchanges (DEXs) – recently surpassed Coinbase for daily trading volume of Ethereum pairs. Moreover, research firm Delphi Digital found that centralised exchanges experienced a net US$5.5 billion outflow of Ethereum from exchanges over seven days in mid November, coupled with its DEX basket rising 33.8 per cent compared to BTC.
The case for fast self-custody
Centralised cryptocurrency exchanges will still serve an important purpose in the ecosystem for some time to come, but perhaps not forever. In fact, a Binance executive recently stated its CEX may not exist in 10 years because of the macro movement toward DeFi.
To that end, we simply cannot afford to overlook what DEXs bring to the table in terms of security and autonomy. Both CEXs and DEXs have their own laundry lists of pros and cons, and users must be discerning when choosing where and how to store their cryptocurrency to meet their specific needs.
In the wake of FTX’s collapse, the classic catchphrase “not your keys, not your cryptocurrency” rings truer than ever. The danger of keeping your assets on a centralised exchange is that your ability to access your cryptocurrency is fully dependent on the exchange’s ability to transfer it to you.
In a crisis of confidence, investors may panic, attempting to pull all their funds quickly and essentially cause a run on the exchange.


Non-custodial wallets are a great option for those wanting top-notch security.
There are two types of non-custodial wallets: hardware and software. Both store the private cryptocurrency keys, strings of numbers and letters that resemble a highly sensitive password.
Non-custodial options ensure that the user has complete ownership over their assets. Custodial wallets are easier for cryptocurrency novices to adopt, however, the private keys are held by a third party which can come with risk.
The key to DeFi: improving user experience
Most cryptocurrency users, especially novices, have typically gravitated towards CEXs for convenience and user experience reasons. In order to both on-board and retain more users, the glaring DeFi user experience issues must be addressed.
One of the largest barriers to mass adoption of DeFi is the lack of a seamless and secure on-and-off-ramping process. If key DeFi entities are able to perfect the entry and exit points to and from their platforms, they will facilitate a much more approachable and accessible experience for all users.
Above all else, there must be trust in user autonomy over assets, no matter the platform. Ultimately, the industry can restore trust amid the FTX catastrophe by making cryptocurrency more accessible – and transactions faster.
While the macroeconomic environment remains a devastating one for retail investors and the cryptocurrency community at large, the Web3 revolution is still very much poised to overtake legacy finance.


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In light of the uncertainty of centralised finance, users need ways to transact and move funds with ease and security more than ever before
Above all else, there must be trust in user autonomy over assets, no matter the platform


In light of the uncertainty of centralised finance, users need ways to transact and move funds with ease and security more than ever before. Individuals must be empowered to take control of their cryptocurrency keys.


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Financial regulation

Bahamas

How cryptocurrency exchanges can regain investors’ trust in wake of FTX collapse

In light of the uncertainty of centralised finance, users need ways to transact and move funds with ease and security more than ever before Above all else, there must be trust in user autonomy over assets, no matter the platform

In light of the uncertainty of centralised finance, users need ways to transact and move funds with ease and security more than ever before

Above all else, there must be trust in user autonomy over assets, no matter the platform