Former Bitfinex CSO Says Crypto Exchange Maintenance Is Extremely Challenging Task to Do

Marketplaces and exchanges have been around for centuries. Looking back at it, starting any new exchange has never been easy. However, maintaining a crypto exchange is a different beast altogether.

Regulation is the biggest risk to the industry and a number of exchanges are less than prepared to deal with carrying out the changes that may be necessary in order to meet regulatory requirements. It is not just the costs relating to re-onboarding and re-screening users to comply with KYC/AML standard, but in some instances, there were reports of data and trade mismatch on various exchanges.

In the recent episode of whatbitcoindid with Peter McCormack the former CSO of Bitfinex reflected on similar topics.

“All the other exchanges had some kind of Nexus somewhere there, based somewhere and a bunch of kids in an office coding away or doing KYC. But Bitfinex was very much decentralized company, for you know to trade decentralized currencies.”

Bitfinex has had a rough and controversial run, from withdrawal problems to rumors of insolvency. There are hundreds of crypto exchanges, but they all operate independently. There is NO one price rule to aggregate them. Hence, a crypto trader does not necessarily know whether he/she receives the best price in the aggregated market.

Since crypto exchanges are not regulated, it also means that companies listed on these exchanges are not regulated. Additionally, unlike public companies listed on a stock exchange, companies listed on a crypto exchange are not required to publish financial statements or disclose any information.

Potter adds:

“Running a Bitcoin exchange means you are constantly under attack, constantly under attack and they would necessarily not come at you from the direction you think they are coming at you.”

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