CEFIREGULATION

Financial Times Transparency Survey: Eight CeFi entities refuse to disclose any information, Bybit and Crypto.com listed

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Financial Times Transparency Survey: Eight CeFi entities refuse to disclose any information, Bybit and Crypto.com listed

Financial Times investigated 21 CeFi entities, including cryptocurrency exchanges, lending platforms, market makers, and venture capital firms, of which eight refused to disclose any information on even the most basic questions.

The Bankruptcy Crisis of CeFi Highlights Transparency Concerns

Reports indicate that following a series of physical bankruptcies in the CeFi sector last year, issues such as user asset protection and transparency in the governance of crypto enterprises have become the focus of attention across various sectors.

Moreover, the UK regulatory body has rejected 265 cryptocurrency-related license applications in the past three years, with an 85% failure rate, further highlighting concerns about the compliance procedures in the crypto industry.

The investigated CeFi entities include:

  1. Exchanges: Binance
  2. Exchanges: Coinbase
  3. Exchanges: Kraken
  4. Exchanges: KuCoin
  5. Exchanges: Bitfinex
  6. Exchanges: Gemini
  7. Exchanges: Bitstamp
  8. Exchanges: Coincheck
  9. Exchanges: OKX
  10. Exchanges: Bybit
  11. Exchanges: Crypto.com
  12. Exchanges: Huobi
  13. Market Makers: B2C2
  14. Market Makers: Wintermute
  15. Lending Platforms: BlockFi
  16. Lending Platforms: Genesis
  17. Stablecoin Issuers: Tether
  18. Venture Capital Firms: DCG
  19. Venture Capital Firms: Jump
  20. Crypto Asset Management Firms: Abra
  21. Crypto Asset Management Firms: Amber Group

Transparency Ranking: Coincheck Leads Among Japanese Exchanges

The Financial Times raised the following questions:

  1. Where is the headquarters located? Who are the main regulatory bodies?

  2. Do they have a board of directors, independent directors? Who are the members?

  3. Who are the CFO, Chief Compliance Officer?

  4. Which auditing firm do they use? When were the latest audited financial statements released?

  5. How many employees do they have?

  6. Do they lend out user assets or use them as collateral for loans?

  7. Do they engage in proprietary trading, market-making activities?

  8. Are assets and liabilities matched?

  9. Is trading, custody segregated?

  10. Do they have a platform token? What percentage of the company's assets does it represent?

In the responses from various CeFi entities:

  • Blue: Full disclosure

  • Yellow: Partial disclosure

  • Pink: No response

  • Gray: Mismatched questions, not relevant to the physical business

Eight CeFi Entities Refused to Disclose Any Information

It can be seen that all responses from Coincheck are marked as "full disclosure," while Bitstamp is penalized for only providing office information and claiming to have no headquarters.

Interestingly, despite being the only globally listed crypto exchange, Coinbase claimed to have no headquarters:

Coinbase is a decentralized company, with no "headquarters," but we have legal entities, licenses, and operational centers in many jurisdictions.

Additionally, Binance has the largest corporate scale with over 8,000 employees, while Bitfinex, as a well-established international exchange, has only 250 employees.

The CeFi entities that refused to answer any questions include:

  • DCG
  • Abra
  • Jump
  • Bybit
  • BlockFi
  • Genesis
  • Crypto.com
  • Amber Group

For the responses from each CeFi entity, please refer to this link.