Ilya Bere, CEO of instant crypto exchange service Changelly believes that while decentralized exchanges have a good use case, the technology is yet to be perfected.
Making the comments during a wide-ranging interview with Bitcoinist, he touched on several points of interest including the changing regulatory landscapes for know-your-customer (KYC) procedures, user anonymity and privacy and the future of cryptocurrency trading as a whole.
No Big DEX Players
Regarding the promise held by decentralized exchanges, Bere explained that while the concept gets a lot of positive airtime, it has not yet been demonstrated to work convincingly because DEX platforms generally suffer from low liquidity.
In his words:
Some users prefer decentralized exchanges but they have to face a lack of liquidity and you still can’t buy crypto for fiat money anonymously there. [...] At the same time, everybody’s been talking about DEXs during last 5 years, at least, but still, there are no really big players, compared to the traditional ones, on that market. I guess we’re not just there yet but I believe that Changelly will play its role in that evolution one day.
Going further, he mentioned that decentralized exchanges provide a useful option for users with a special interest in privacy, at a time when KYC regulations are increasingly becoming a sticking point for many.
He also mentioned that Changelly is in the process of moving its jurisdiction to Malta, becoming the latest in a slew of crypto companies moving to the Mediterranean island, attracted by its crypto-friendly regulatory position.
Changelly on KYC Rules
In response to a question about Changelly’s transaction cutoff mark that triggers KYC alerts, Bere explained that such information cannot be released publicly due to Anti Money Laundering (AML) compliance.
He also revealed the cut off points are dynamic and constantly changing based on a range of variables including current events, alerts from other exchanges and hacks. Explaining the absence of fixed, arbitrary cutoffs he said:
What’s important is that we always warn our users about possible KYC checks before a transaction is initiated, so they are free to use Changelly or any other instant exchange service.
In his view, Changelly’s mission is to find a compromise between authorities who are increasingly insistent on KYC and users who look for privacy. KYC regulations in his view will not have any substantial effect on crypto adoption because crypto users are already divided into two distinct groups. Namely, those who want to have guarantees and are willing to follow rules, and those who will simply migrate away from centralized platforms.
He also clarified a recent point of controversy where it was claimed that Changelly has the power to seize users’ Monero (XMR), clarifying that the company is required to delay certain transactions under EU law if they are considered suspicious or fraudulent.