Only 14% of Crypto Exchange Have Licence from Regulators

A regulatory technology (reg tech) crypto startup Coinfirm published a crypto exchange risk report on 27 March. The report shows that out of 216 global exchanges only 14 percent have a licence from regulators.

Coinfirm is a global leader in compliance technology for cryptocurrencies and the blockchain-based financial ecosystem. Coinfirm is established in 2016 and since then there is a massive growth in a number of cryptocurrency exchanges.

The study is done on 216 global crypto exchanges to analyse the key risk factors associated with each platform. The exchanges cover 90 percent of the market volume. The report includes a variety of exchanges, some with fiat to crypto trading and some with only crypto to crypto trading.

In the study, crypto exchanges are divided into seven different categories. The different categories include Customer Due Diligence (CDD) and Know Your Customer (KYC) compliance, license and authorization, Anti-Money Laundering (AML) compliance, sanctions, senior public figures, jurisdiction, and negative and adverse media.

In the report, Coinfirm provides risk performance of the exchanges with specific jurisdictions. The low-risk countries include Australia, Norway, Sweden, Finland, Germany and others. The high-risk nations include Russia, Belarus, a number of African countries and others.

The United States, Canada, the United Kingdom, Brazil, China, India, Saudi Arabia are reported as medium risk countries.

In the report Coinfirm found that only 60 percent of the exchanges allow fiat to crypto trading. Amoung the 60 percent of exchanges only 23 percent have full KYC process for deposits and withdrawals of fial currencies.

What is the Purpose of This Report?

  • To aware users about the risk involved in trading on cryptocurrency exchanges.
  • Give information to the users to make good decisions that will reduce the risk factor.
exchange risks

Binance the biggest crypto exchange by daily trading volume have high-risks according to the report. Coinfirm added that the exchange appeared to have been regularly changing jurisdictions, which infers potential regulatory arbitrage.

Bitcoinik reported that Bittrex is launching its Initial Exchange Offering (IEO) on April 2. WhatsApp the largest messaging platform may integrate a Bitcoin wallet for payments.

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