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

REYKJAVIK, Iceland, June 19, 2023 /PRNewswire/ — The SEC and other regulatory bodies have proven lately what we suspected all along:

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

One of the biggest hurdles centralized crypto exchanges face is regulatory difficulties, especially in the U.S. The SEC has been cracking down on crypto-related activities, imposing strict rules and regulations that might be intended to protect investors, but more often stifle innovation and growth.

Recently, the SEC issued new guidance requiring companies to disclose their involvement with digital commodities firms, such as crypto exchanges. The SEC also sued Coinbase, one of the most popular and compliant crypto exchanges in the U.S., 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 measures from the SEC are in conflict with the best interests not only of Americans, but investors at-large.

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

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 over the crypto market. They can:

  • Manipulate 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?)

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

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

True decentralization requires transparency and honesty. If these exchanges were honest, they wouldn’t promote (or even list) any asset that doesn’t have a solid backing or value proposition. For example, Coinbase has been criticized for promoting so-called “shitcoins” like SHIB and DOGE on its site.

If these same exchanges cared about the financial well-being of their customers, they’d also clearly display token liquidity levels on their sites. No such luck, most of the time.

All that to say: centralized exchanges should serve their users rather than exploit them. It’s bad enough that regulatory pressure seems to be squeezing retail investors. The exchanges themselves shouldn’t squeeze investors, too.

Despite the fact that investors shouldn’t be scammed by exchanges, the stringent oversight seems counterproductive in benefiting people and underlines the need for a better solution.

Crowdfunding Through Small Investments

MyntExchange proposes a new model for supporting both small investors and small companies with benevolent visions: crowdfunding through small investments. This model allows for organic growth and democratizes investment opportunities.

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

In fact, we want nothing to do with crypto as it stands now.

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

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

Imagine a crowdfunded investment platform, on the other hand, which allows users to invest as little as $10 per month in projects that they believe in. This way, users can diversify their portfolios, reduce their risk, and participate in high-growth projects they used to need hundreds of thousands of dollars to invest in.

These lofty investment requirements can corner companies into sacrificing their core vision and values, just to secure early-stage funding. But there’s no such things as a free lunch: investors who inject early capital early typically command a sizable share of profits and exert significant control.

This leaves little room for the original creators to manoeuvre, frequently hamstringing the project before it has a fair shot at success.

On the bright side, a system like MyntExchange can cultivate a truly collaborative environment. One where the platform’s trajectory is determined by its users, not its owners.

The Future of Retail Investing

Centralized exchanges may grapple with security risks, regulatory issues, customer service problems, user interface complexities, and funding issues. However, with innovative models like MyntExchange, the future of retail trading appears promising.

MyntExchange offers a platform that’s inclusive, transparent, secure, fast, and user-friendly. We  solve the problems of centralized crypto exchanges and create a better alternative for hedge funds and venture capital investments at the same time.

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

Will you be a part of it?

If you’re interested in learning more about MyntExchange, [].

whitepaper: here


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