Why Most Centralized Crypto Exchanges Fail (and How to Fix Them)


REYKJAVIK, Iceland, June 19, 2023 /PRNewswire/ — The SEC and other regulators have recently proven what we’ve always suspected:

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Not all crypto exchanges are created equal. And in fact, many of them are downright unethical.

One of the biggest hurdles centralized crypto exchanges face is regulatory issues, especially in the US. The SEC is cracking down on crypto-related activity, imposing strict rules and regulations that are designed to protect investors, but more often stifle innovation and growth.

Recently, the SEC issued new guidelines requiring companies to disclose their involvement in digital commodity companies, such as crypto exchanges. The SEC also sued Coinbase, one of the most popular and compliant crypto exchanges in the US, for failing to register its lending products, which would allow users to earn interest on their crypto holdings.

The SEC also filed charges against Binance, the world’s largest crypto exchange by volume, for allegedly facilitating the buying and selling of unregistered securities.

Such heavy-handed action by the SEC is not only against the interests of Americans, but also against the interests of investors in general.

These recent crackdowns highlight the challenges associated with centralized exchanges and point to the possibility that the solution may lie in exploring something new.

The problems with centralization

Many exchanges like Binance and Coinbase are part of a larger cycle of increasingly centralized control that contradicts the decentralized ethos of blockchain technology.

For example, centralized exchanges often have a lot of influence on the crypto market. They can:

  • Manipulating prices
  • Censor transactions
  • Freeze accounts
  • Impose arbitrary rules and fees

They can also be hacked, compromised, or shut down by authorities or malicious actors (but hey, what’s the difference?)

In addition, many centralized exchanges engage in unethical practices that harm their users and the investing community at large. These include:

  • Promoting non-existent or worthless assets
  • Charge exorbitant listing fees
  • Hiding their true liquidity levels
  • Artificially inflating their trading volumes

True decentralization requires transparency and fairness. If these exchanges were honest, they wouldn’t promote (or even list) assets that lack solid support or value proposition. For example, Coinbase has been criticized for promoting so-called “shitcoins” such as SHIB and DOGE on its site.

If those same exchanges cared about the financial well-being of their customers, they would also clearly display token levels of liquidity on their sites. No luck, usually.

All that to say: centralized exchanges should serve their users instead of exploiting them. It’s bad enough that the regulatory burden seems to be weighing down small investors. The stock markets themselves should not put investors under pressure either.

Despite the fact that investors should not be scammed by exchanges, the strict oversight seems counterproductive in favor of people and underscores the need for a better solution.

Crowdfunding through small investments

MyntExchange proposes a new model to support both small investors and small companies with a benevolent vision: crowdfunding through small investments. This model enables organic growth and democratizes investment opportunities.

Similar to the brokenness of the centralized exchange model, the traditional venture capital model is also broken. Both factors combined lead to the downfall of many promising companies, both inside and outside of crypto.

Actually, we don’t want anything to do with crypto as it stands now.

We simply believe in blockchain technology as a means of helping venture capital.

This new model works because it allows people to enter venture capital and hedge funds without minimum investments. Many hedge funds require minimum investments as high as $100,000or even $1 million.

In contrast, imagine a crowdfunded investment platform that allows users to invest as little as possible $10 per month in projects they believe in. In this way, users can diversify their portfolios, reduce their risk and participate in high-growth projects that used to require hundreds of thousands of dollars to invest in.

These lofty investment requirements can drive companies to sacrifice their core vision and values ​​just to secure early stage financing. But there’s no such thing as a free lunch: Investors who inject capital early typically own a significant portion of the profits and exercise significant control.

This leaves little room for the original creators to maneuver, often crippling the project before it has a fair chance of success.

On the other hand, a system like MyntExchange can cultivate a true collaborative environment. One where the journey of the platform is determined by the users, not the owners.

The future of retail investing

Centralized exchanges can struggle with security risks, regulatory issues, customer service issues, user interface complexity, and funding issues. However, with innovative models like MyntExchange, the future of retail looks promising.

MyntExchange offers a platform that is inclusive, transparent, secure, fast and easy to use. We solve the problems of centralized crypto exchanges while creating a better alternative to hedge funds and venture capital investments.

MyntExchange is more than a crypto exchange. And it’s more than a hedge fund. It is a movement that aims to improve the world using blockchain technology.

Will you be part of it?

If you want to know more about MyntExchange, [Myntexchange.io].

white paper: here


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