CryptoGlobe Talks to CODEX CEO Serge Attic

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Crypto exchanges have had a tough crypto winter.

With everything from exchange hacks, CEO deaths to just plain vanilla low interest in trading, most of 2018 was far from perfect for most exchanges. Nonetheless, many platforms have taken the opportunity to hunker down during the bear market and work on improving their platforms. 

One platform that fits this bill is CODEX. We spoke to CODEX CEO Serge Attic about the bear market, the unique features of their exchange, QuadrigaCX and their roadmap for 2019.

How did you get into crypto?

The first time I encountered Bitcoin was in 2012, when I was looking for solutions for integrating with e-commerce payments and found Bitcoin's distributed technology very promising, but very young for widespread acceptance by business. My next involvement was a few years later. I was invited by a small commercial bank to lead a project, which aimed to build an e-money based on blockchain technology. I was impressed with the idea of using a fuly-fledged cryptocurrency in a massive e-commerce market. Now I believe blockchain and crypto will transform people’s financial habits and  will change the finance industry.

What distinguishes CODEX from other exchanges?

Unlike other exchanges, we focus on providing our users with top-tier security and fiat gateways. Security is a serious issue: while we hear about exchanges' being hacked, we don't really hear a lot about security standards despite the age of the industry. 

First of all we want to make sure that users' funds are safe with us. We are a centralized exchange, but recently we moved towards a hybrid approach by implementing some features of decentralized exchanges. We understand the necessity of providing a convenient way to buy cryptocurrencies, and that's why expanded our partnerships with payment providers. This allowed us to open for local markets. We started with Ukrainian and European markets, and implemented UAH and EUR gateways accordingly. 

What makes CODEX extra secure?

We use several security measures and constantly improve them. These measures include intrusion detection, prevention and monitoring, the usage of HSTS policy and using EdDSA cryptography when users work with their API keys. As far as I know CODEX is the only exchange to use the EsDSA API. In addition, to reduce credentials attacks we allow our users to login to CODEX with a QR-code only - via Scatter or any wallet which supports the SimpleWallet protocol. 

Of course, we also do cybersecurity audits. Our recent audit by Hacken awarded us with a 10/10 web platform security grade. It's important to mention that CODEX is compliant with Payment Cards Industry standards. We do not store and thus do not share our clients' cards data. CODEX also obtained licenses from EU regulators for exchange services and custody storage. This adds an extra layer of security as it sets us up within a regulated landscape. I see this as a plus for our users.

How did the bear market of 2018 affect you? Is the new bull(ish) run affecting you?

During the bear market we focused solely on development. We saw a significant drop in interest for trading on cryptocurrency exchanges. There was even a time when cryptocurrency traders moved to FOREX markets. But we were ready for this and we had different priorities. The new bull run certainly increased interest among various groups of users interested in cryptocurrencies. Soon we'll see even bigger growth in fiat-to-crypto transactions. Thankfully, we provide such a gateway.

What do you think deters new customers from trading on exchanges?

A lack of education and incomplete financial inclusion. It's a complicated landscape. New users find it a hard task ask to learn everything about money first, then about ryptocurrencies, then how exchanges work and, finally, how to work with an exchange. It takes time. 

What lessons do you think the industry can learn from QuadrigaCX?

Industry players can learn a lot here. We need to set up industry security standards and  educate users to care about their own security. QuadrigaCX made a few simple mistakes, which are unacceptable to any expert in the field of cybersecurity. Of course, users can rely on a technical infrastructure, but they cannot rely on personalities. A good idea here is to check how transparent the exchange is, what are its roots and history, and who the team members are. Greater exposure leads to greater reputational damage if someone has malicious intentions. 

If Libra goes ahead, will you list the coin on your exchange?

We will do that if there is a demand from our users to list Libra on CODEX. Right now it is a controversial topic. Exchanges as instruments should not decide on providing or not providing access to certain assets as has happened with BSV and its delisting. CODEX didn't list BSV as we didn't see an appropriate level of demand. The market should decide.

What’s on the roadmap for CODEX in 2019 and beyond?

We plan to work on exchange's usability features, improve security measures and add more stablecoins to help our users diversify risks. We also want to provide more financial instruments to our users. For example, we are currently working  on providing our users with an ability to buy stocks with cryptocurrencies.

Weekly Newsletter

Two Brazilian Crypto Exchanges Close Following Change in Tax Laws

  • Two Brazilian exchanges have been forced to close in the face of strict new regulations.
  • Exchanges are required to keep track of all transactions made with cryptocurrency or pay fines. 

Two Brazilian cryptocurrency exchanges have been forced to shut down following the enactment of new tax laws. 

Following reports of rampant cryptocurrency-related fraud in 2019, Brazilian politicians have created and enforced new tax regulations for the industry of cryptocurrency. 

According to a report by Bitcoin.com, exchanges Acesso and Latoex are two of the first casualties of the increased regulation. Both exchanges have decided to end operation, rather than pay the hefty fines and comply with strict regulation in the face of shrinking trading volume. 

Pedro Nunes, co-founder of Acesso Bitcoin, told Portal do Bitcoin, 

After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume. We also feel that the market has cooled off for smaller exchanges.

The new regulations, implemented in August 2019, require traders and brokerages to report all transactions involving cryptocurrencies. Failure to comply results in penalties ranging from 500 BRD to 1500 BRD ($120 - $360). 

Exchanges say that compliance with the new regulation requires expensive investment into new resources, which has been untenable for smaller and less profitable organizations.

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