Following the collapse of FTX and its subsequent impact on user trust in centralized exchanges (CEXs), a recent report by Nansen sheds light on the response of major players in the industry. Binance and Bitget, among others, have taken proactive steps to strengthen security and transparency measures in order to rebuild confidence.
A significant development in this regard is the adoption of Proof of Reserves, enabling users to gain visibility into exchange holdings and balances. Binance and Bitget have gone a step further by disclosing wallet addresses for their protection funds, serving as insurance against hacks and unforeseen events.
Both platforms have also bolstered their protection funds, with Binance increasing theirs from $735 million to $1 billion, and Bitget from $200 million to $300 million. These measures aim to provide additional safeguards for customer assets and reassure users of the platforms’ commitment to security.
Despite these efforts, the collapse of FTX has had a tangible impact on trading volumes across the CEX landscape. Factors such as market downtrends, decreased trust in centralized exchanges, and increased regulatory pressure have contributed to this decline. However, Kraken and Bybit have observed an increase in spot trading volume, while Bitget has maintained its position with a 4.85% growth in average trading volumes for derivatives, reaching $204 million.
Nansen’s report underscores the criticality of security and emphasizes an exchange’s track record as evidence of its legitimacy and sound implementation of security measures. While no major exchange has suffered direct hacking incidents since the FTX collapse, the persistent threat highlights the need for robust risk management and protection funds to safeguard customer assets and maintain trust in the crypto industry.
