Decentralized Exchanges Are ‘Not Just There yet’ Says Changelly CEO Ilya Bere

  • Changelly’s CEO said that decentralized exchange technology hasn’t been perfect.
  • The CEO also revealed that Changelly is set to move to Malta as KYC regulations become increasingly important.

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.

Neatly 70 Crypto-Focused Funds Closed This Year as Institutional Investors Tread Carefully

Data from the San Francisco-based Crypto Fund Research has shown that nearly 70 cryptocurrency-focused hedge funds have closed this year, while the number of new funds opening is nearly half of what it was in 2018.

The funds reportedly mostly catered to pensions, family offices, and wealthy individuals. Region-wise, data shows North America leads in the number of crypto fund closures with 28 shutting down this year. Europe followed it with 23 closures, and the Asia-Pacific region came in third with 14 closures.

Bloomberg reports that the volatile nature of cryptocurrency prices and regulatory uncertainty surrounding the nascent space have been keeping institutional investors at bay. Nic Carter, the co-founder of Boston-based crypto market tracker Coin Metrics, was quoted as saying the market is “definitely retail driven and will remain so for the foreseeable future.”

The news outlet noted, however, that a Fidelity survey has shown institutions’’ investments into cryptocurrencies are likely to increase over the next five years, and that the CEO of Galaxi Investments Mike Novogratz has said in a recent interview he believes the next wave of adoption will come from “the wealth advisers, maybe with endowments and small foundations participating.”

Spencer Bogart, general partner at San Francisco-based Blockchain Capital, pointed out it’s a matter of expectations, as while to some the levels of institutional adoption are “disappointing or underwhelming,” to him they are a “radical success.” He said:

To me, the fact that there is any institutional adoption for Bitcoin only 10 years into existence is a radical success and beyond what anyone could have imagined just 3 or 4 years ago.

Data from the Crypto Fund Research’s website shows there are currently a total of 804 cryptocurrency-focused funds, 355 of which are hedge funds, and of are venture capital funds. Most crypto funds – 403 – have less than $10 million worth of assets under management, while only 57 have over $100 million under management.

Featured image via Pixabay.