Crypto Exchange Corruption And Why Many Will Be Gone Soon.
The age of cryptocurrencies is extremely competitive. With an abundance of new blockchains, alternative tokens with solid use cases and billions of dollars changing hands daily its no wonder why there are so many making efforts at grabbing their piece of the pie while everything is still in its infancy.
With more than a couple hundred crypto exchanges, there are some glaring issues that are simply not good for the space overall.
#1. Exchange Wash Trading - this is a practice exchanges use to inflate their trade volume to not only make their exchange more popular, but also charge insanely high listing fees to companies looking for more liquidity for their security or token. It's done primarily by bots but not in the way you may think of an automated trading bot. These bots aren't trading for profit. The wash trading bots are basically just moving large sums of crypto back and forth.
#2. Licensing - The majority of exchanges simply aren't licensed or regulated in any way. This means your funds aren't insured or safe and the exchange could be shut down at any time. With no oversight, these exchanges are a haven for potential corruption and illicit activities and should something happen, you're likely very much out of luck or support. Whether an exchange is operating under a Money Transmitter License in each US State and or country (which is costly due to the need for Surety Bonds before even applying for a MTL and to cover the USA alone you would need 44 licenses and bonds. Then, you have to consider the time to apply and be approved which could take a year or longer for each one and all of this is just to trade Tokens, no securities and no Fiat to Crypto transactions) or a Broker Dealer license which is not only costly but you have a very long list of restrictions, expenses and time in either setting one up, buying one off the shelf and then getting is transferred while having the requirements in place to operate one, etc etc, getting properly regulated and compliant is an expensive struggle most exchanges wont bother with. There are alternative means of operating through 3rd parties but they can be expensive as well and most exchanges are simply operating for as long as they can get away with it before being shut down.
#3. Greed - Of course, everyone in business wants to make money. However, there is good business and then there is greedy business. For example, if a particular coin is about to fork at a 1 for 1 and an exchange says they aren't supporting the fork, yet behind the scenes they are setup to support it for themselves, the coin forks and the exchange keeps everything...is that good or greedy business? They stated they aren't supporting the fork and let everyone know so they could move their coins elsewhere, but those types of practices happen quite often.
What about listing fees? Perhaps its normal to negotiate listing fees to get as much out of a project as possible, but to me, charging one company a million dollars and another $150,000 doesn't feel right.
Why CrowsNestEx? I set forth on a mission to launch an exchange that people could trust for being honest and do good business over greedy business. As has been my way since I first started into this realm of disruption, I've always made every effort to be transparent and brutally honest at every turn. This approach makes some things more difficult short term, but long term enables me to not worry about things catching up to me later on down the road.
CNE is taking the approach of launching with integrity, compliance, regulation and ethical standards. No wash trading for inflated fake volume. 3 Tiers for Listing fees that are the same for all projects and a chart that enables projects to calculate their own listing fee and more.
a. We are launching with a 3rd party custody provider that is federally regulated and nationally chartered banking institution. Fiat deposits including BTC, ETH and several other cryptocurrencies will be insured up to $250,000 per user. They will be handling all of our AML/KYC to ensure proper and compliant execution. Setting up an account on CNE will be like creating a new bank account.
b. We will be offering solutions to trade utility tokens only. No securities. Perhaps in the future we will enable securities trading but for now, we want to establish a foundation from which to grow. All listings will undergo a legal review. Companies interested in listing with CNE can apply here.
More news and updates to come as things progress from here.
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