The Australian Stock Exchange (ASX) warned local investors about the significant risk of losing funds when storing cryptocurrencies on centralized exchanges.
The document emphasizes that clients of centralized sites do not have access to private keys from exchange wallets. In fact, they entrust their funds to strangers, because “if you do not have the keys, then there are no coins.”
In addition to the risks of fraud from representatives of exchanges, there are also risks of cyber threats. Centralized sites are constantly hacked, and funds are withdrawn by hackers. Between 2011 and 2020, according to Crystal Blockchain, criminals were able to steal about $ 7.7 billion in cryptocurrencies.
That being said, ASX officials acknowledge that the number of hacks on centralized exchanges has declined in recent years as hackers have shifted their focus to decentralized projects.
Another risk for users of cryptocurrency exchanges is the possibility of leakage of their personal data. If a noticeable level of anonymity remains on decentralized exchanges, then the centralized sites have all the information they have requested, including the amount that the trader operates with.
ASX representatives advised the Senate Special Committee on Financial Regulation Technologies to create basic requirements for ensuring the security of cryptocurrency exchanges, as well as strengthen requirements for reporting and insurance of funds.
ASX has been developing a blockchain-based settlement system for a long time, but its launch has been repeatedly postponed. A crypto ETF may appear on the Australian stock exchange product listings this year.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
