The whole crypto industry is undergoing an earthquake now as one of the largest crypto exchanges FTX is on the brink of collapse. It started out as Binance claims to liquidate all the FTT tokens based on revelation from a report which indicates possible insolvency of Alameda Research which is the trading firm of FTX’s CEO Sam Bankman-Fried.
This soon triggered a drastic price drop of FTT and a liquidity crunch on FTX. Even though Binance and FTX soon reconciled with the former agreeing to acquire the latter, it didn’t stop liquidity crunch to spread across some of the major exchanges where many users are halted from withdrawals.
The crisis once again raised the discussion about the regulation’s importance for the crypto industry. It seems that facing a liquidity crunch like this, regulated crypto exchanges are better equipped to ensure the safety of users’ assets. MoonXBT, the leading crypto social trading exchange which is regulated by Securities and Exchange Regulator of Cambodia (SERC) has shown full capacity to provide asset safety to crypto users at large.
MoonXBT maintains healthy balance sheet and abundant reserve
One of the main reasons exchanges cannot handle liquidity crunch is the lack of the reserve held by the exchanges. “It is crucial for exchanges to hold enough reserves to make sure users can make withdrawals however much they want and whenever they want,” says Jack, the CEO of MoonXBT.
As a direct partner of the Cambodian government, MoonXBT has been examined thoroughly by the top financial enforcement branch SERC of its financial status. MoonXBT has met the SERC’s standard of the holding reserve on its books and risk management requirements to handle emergency withdrawals or moreover liquidity crunch.
MoonXBT never uses users’ funds for collaterals
Another reason for FTX’s sudden collapse is due to its liabilities. Regardless of its massive scale, its liability may equal or even exceed its assets. It is not clear how much of the users funds are used as collaterals for loans. Using users’ funds for other DeFi activities can bring large amounts of uncertainty to asset safety.
Under the regulatory framework of SERC, MoonXBT follows the regulations strictly and will not use users’ funds as any form of collateral, nor will it be used for other kinds of DeFi activities. Users can be assured that their funds stay where they are on the platform.
MoonXBT always put the users’ interest at first
MoonXBT is the second crypto exchange following Binance to have become a partner with SERC. As a young exchange, one of the reasons it has been handpicked by the Cambodian government is its value of always putting the users’ interest first.
For instance, during the LUNA crisis in May, MoonXBT chose to compensate users who suffered losses for their positions on non-LUNA-and-APE due to emergency shutdown which was a must as a regulated exchange.
Now facing the FTT and its related risks, MoonXBT takes instant measures and delist the liquid contract for FTT and SOL to protect users’ interest.
MoonXBT has bank-level security infrastructure
As a SERC regulated crypto exchange, not only MoonXBT follows all the disciplines to hold enough reserve and apply no misuses to the users’ funds, it also has a solid security infrastructure to protect the users’ funds technically.
MoonXBT has worked with the industry’s leading security firms to upgrade its security capabilities. It has worked with Fireblocks as asset custodian to safeguards the users’ assets. It has also worked with code audit company Certik to make sure the platform is immune to hacks.
With the above being said, if you are concerned about how to safeguard your crypto asset facing the liquidity crunch across the exchanges and the industry turmoils, the SERC regulated MoonXBT may be a safe place to go.
For more information, please visit https://www.moonxbt.com/