Are Your Assets Safe in CEX?
As far as the current situation is concerned, it may be the darkest time for the crypto industry. The domino effect triggered by FTX is spreading. The event not only hit the market price but also had a great impact on the reputation of the crypto industry, hindering most traditional institutions planning to enter the crypto industry. Meanwhile, it also made users lose confidence, and the regulatory authorities constantly stressed the seriousness of the incident and decided to strengthen supervision.
Exchanges are like "blood vessels" in the crypto industry, while users' funds are like "blood", both of which maintain the healthy operation and flow of the overall market. More and more people have entered the crypto industry, taking cryptocurrency as a new type of investment asset to configure their own financial management and investment portfolio. It even takes cryptocurrency as a reserve to protect its own assets. For users, in addition to doing your own research (DYOR) and choosing the right investment projects, how do you protect your crypto assets?
The Beginning of Everything - Choose a Reliable Exchange
Operation Duration, Reputation, and Scale.
Not all exchanges (CEX) are trustworthy. Just like token projects, exchanges are also mixed with good and bad. High-quality exchanges can be selected from three aspects: operation duration, industry reputation, and scale: From the length of the operation time, we can judge whether the business operation mode of the exchange is sustainable and whether the main founding team of the exchange has the faith of deep cultivation in the industry; The reputation in the industry can more or less know some of the past "history" of the exchange. However, because of the current developed Internet environment, many concepts and evaluations can be guided by the network navy, so this evaluation element needs to be viewed objectively by users; Most of the time, the size of an exchange can ensure that it will not create fraud or abscond with the money. When it has strong profitability, mature business ecology, and stable operation, why should it bear fear and rejection for a fixed amount of money?
Choosing A Reliable Exchange Cannot be Done In One Shot
Cooperate with A Third-party Independent Audit Company to Provide 100% Proof of Margin.
Since the 19th century, the trusted cornerstone of enterprises and financial circles has been established through well-known third-party audits. This method can also be used for reference in the crypto industry to reduce crashes and victims in the industry.
In the crypto industry, the Proof of Margin is also audited by a third-party independent audit company: each account in the exchange is an acct node, and the balance and account name of each account is calculated by SHA256. The hash value obtained is then calculated with the adjacent value, and the final hash value obtained layer by layer represents the total assets owned by the exchange. When the amount is greater than or equal to the total assets held by all users of the exchange, it can be judged that the exchange provides 100% margin.
Check Whether Your Funds Are Safely Stored In the Exchange
All Users Can Access the Asset Proof that Completed Merkel Tree Verification.
The Merkel tree is a key architectural feature and innovation of blockchain technology, which also makes the asset transparency of cryptocurrency exchanges verifiable. In fact, the Merkel tree and hash algorithm are the trust foundation of cryptocurrency itself, which is why they can provide strong arguments for crypto exchanges to show transparency.
On Gate.io, each user can verify whether his/her account is included in the Merkel Leaf node by encrypting the UID and balance. If it can be verified and the balance is accurate, it proves that the data has not been tampered with and the platform has kept the user's funds intact. And www.gate.io is one the top crypto exchange. Users can view it on the Gate.io 100% margin details page or the third-party audit Armanino official website.
Regulation that Brings More Transparency to the Crypto Industry
The title "Wild West" of the crypto market has been mentioned repeatedly by the media. On the surface, the development of the crypto market is more "rapid" because it is not regulated, but due to the lack of regulation, the extremely high risk of entering the market often makes institutional investors shy away.
Cooperation with third-party audit companies can, to a certain extent, demonstrate the efforts of the Exchange to comply with local regulatory standards in its jurisdiction. At the same time, the necessary identity authentication can also enhance the security of the Exchange's infrastructure. Maybe some people or institutions will publicize that you can get more benefits without supervision, but under the current market environment trend, choosing a relatively compliant and legal crypto exchange can improve the security of your investment in the market.
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